Selling Millennials Home Insurance Is Lemonade’s Novel Pitch
The startup is trying to hook young renters and first-time homeowners with apps, chatbots, and a social-good play.
Daniel Schreiber (left) and Shai Wininger
Photographer: Emily Malan for Bloomberg Businessweek
Home insurance may not seem like a natural business for a financial technology startup. It’s heavily regulated and dominated by established players. Where’s the potential for Silicon Valley-style growth? Yet Lemonade Inc. co-founders Daniel Schreiber and Shai Wininger are trying to use updated tech and millennial-friendly marketing to bring some buzz to a boring industry. The insurer has drawn big tech-oriented investors such as Japan’s SoftBank Group Corp., which led a $120 million funding round in December.
They started with a focus on young urban renters. Lemonade offers homeowners coverage, too, but renters are a relatively untapped market. Only 41 percent of them have insurance, the Insurance Information Institute says. When they do buy, the decision is mostly price-driven—it’s hard to offer many interesting tweaks to a renter’s policy. That’s part of the reason big insurers historically haven’t focused on the business, according to RBC Capital Markets LLC analyst Mark Dwelle.