How Lemonade Could Change Insurance
Insurance is one of the largest markets in the world, generating over $5 trillion in annual revenue . It's also one of the oldest; some of today's largest insurers have been around for over 100 years. By comparison, Lemonade (NYSE: LMND) was founded in 2015. But thanks to its brand-new approach to insurance, the company nonetheless has the potential to disrupt the entire industry.
Unlike most insurance companies, Lemonade was built for a digital world, using big data and artificial intelligence to make its business more efficient. On the backend, Lemonade uses AI to manage workflow and predict fraud. And on the frontend, the company uses AI chatbots to interact with customers, underwrite policies, and pay claims . This allows Lemonade to provide a high-quality user experience at a lower cost than traditional insurers. For example, Lemonade estimates that its competitors employ one person per 150-450 customers, but Lemonade only employs one person per 2,000 customers . This type of efficiency reduces operating expenses and gives Lemonade an edge over its rivals.
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Source Fool.com
