Lemonade's AI-Model May Make It Unstoppable. Even Warren Buffett's Insurance Manager Agrees.
Lemonade (NYSE: LMND) wowed investors earlier this month with a better-than-expected first-quarter earnings report that demonstrated solid growth along with progress toward profitability. Its artificial intelligence-based insurance model has attracted customers from inception, but its ability to competitively price policies more efficiently is finally beginning to show.
Just days later, at the Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) annual meeting, Ajit Jain, Warren Buffett's hand-picked manager of Berkshire Hathaway's insurance subsidiaries, made some comments that shed some light on why Lemonade may become unstoppable.
Lemonade was created to change what people think about insurance. It has B-corp status, which implies a positive social impact, and that was an integral part of creating a shift in the perception of insurance companies. Co-Chief Executive Officer and founder Daniel Schreiber thought that giving excess funds left over after paying claims to charity could reduce insurance fraud. As part of this overall shift, the company was developed on a digital model, with chatbots handling a large percentage of policy sales and claims payments. That results in cheaper policy pricing and faster processing.
Source Fool.com
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