Lemonade well-positioned to capitalize on motor insurance post-COVID-19 with its digital and value-first approach

29 April 2021 GlobalData

Lemonade’s digital and value-first approach is well-suited to the post-pandemic world and provides an opportunity for the insurer to capitalize on the motor industry, says GlobalData, a leading data and analytics company.

GlobalData’s UK Insurance Consumer Survey found that a more flexible and digital motor insurance policy, like the one that Lemonade is likely to offer, is even more relevant in the wake of the pandemic. Over two thirds (69.4%) of respondents said they would drive less miles annually as a result of COVID-19. Consumers will benefit from the type of pay-per-mile insurance that the likes of By Miles and Metromile offer, and value and flexibility will become essential.

Ben Carey-Evans, Insurance Analyst at GlobalData, comments: “The US market is relatively competitive for digital and telematics-based motor insurance. Recent years have seen companies such as Root and Metromile receive vast amounts of funding in this area, making them both insurtech unicorns. However, the US motor market was worth $35,816m in GWP in 2020, according to GlobalData, meaning this represents a substantial opportunity for Lemonade.”

GlobalData’s consumer survey also highlighted that only 7% of UK consumers had heard of Lemonade. This is not an issue at present, as it is launching in the US, but it has made its intentions to move into Europe very clear over the last couple of years (it sells household insurance in Germany, France and the Netherlands). Brand awareness will be key as it looks to challenge established players in the market. However, significant backing makes that an obstacle it can overcome with marketing and its digital expertise should prove popular.

Carey-Evans adds: “Lemonade will be bringing a wide range of digital expertise and very strong customer service skills to the market. The launch of Lemonade Car is at early stages and although it hasn’t released a lot of detail yet, it has promised to provide instant claims and value, while also focusing on electric vehicles. It looks like a strong up-selling opportunity for Lemonade, a company that primarily sells quick and digital household policies to its customers.”

Quick Polls


Financial behaviour experts suggest that today’s risk modelling methodologies ignore your client’s emotional ability / behavioural capacity. What are your thoughts on spicing up risk profiling tools to make allowance for your client’s financial behaviours


[a] Bring it on; my client’s make too many irrational financial decisions
[b] Existing risk profiling tools are adequate
[c] Risk profiling tools should be based on the model / rational client
[d] The perfect risk profiling tool is science fiction
fanews magazine
FAnews April 2021 Get the latest issue of FAnews

This month's headlines

Randsomware attacks... SA businesses' biggest risk
Know the difference - compliance vs ethics
Better business by virtue of Beethoven
The future of vaccines
Harmonisation of retirement funds
Call centres and the maze of auto-prompts
The next 18 to 24 months are going to be tough
Subscribe now