Insurance, insurtech, and the architecture 213
the major industrial companies had dwindled or disappeared, spectacular
collapses notably Equitable’s in 2000, all combined to increase the industry’s vulnerability and intensify the branding challenges it faced. Huge city
centre buildings and the messages they conveyed about solidity, heft, and
permanence were no longer well adapted to the practice of insurance or to
reassuring customers. If anything, they added to a sense of insurance as a
lumbering, impersonal, and conservative industry.
This contrasts sharply with the kinds of messages insurtech start-ups want
their brands to convey. Across the insurtech landscape brands are designed
to be lighter, livelier, and friendlier. Brand names include Friendsurance,
Brolly, Oscar, Spixii, Hippo, and Lemonade. These are brands that are
not so much interested in impressing their solidity on consumers but their
agility, informality, and technique. Lemonade, Inc. offers an example of
how this works. Formed in New York in the same year Aviva opened its
garage, Lemonade offers home, renters, and more recently, pet insurance.
It was launched on the stock market with an Initial Public Offering (IPO)
in July 2020 7 . In a video published on YouTube in the run-up to the IPO,
one of the founders, Daniel Schreiber, introduces a series of word association customer vox pops – insurance is ‘boring,’ ‘complicated,’ ‘a rip-off,’
‘like a trigger word,’ and ‘evil.’ Schreiber cuts in to explain that Lemonade’s
founders wanted ‘to create an insurance company with an entirely different
word cloud associated with it – a lot of people talk about Lemonade as being
delightful, aligned, socially impactful, words like trust and love, those are
the kinds of words that consumers have come to associate with Lemonade 8 .’
Customer delight is linked to the company’s broader proposition of using
machine learning, predictive data, and fast growth to transform insurance.
Lemonade claims that their facility with data allows them to adopt a microscopic approach to risk.
At twenty data points much of humanity looks alike so you price and
underwrite large numbers of people as if they are a uniform, monolithic
group but we found that the data we were gathering, that hundred X
digital zoom we have, it showed us that groups our competitors seemed
to consider to be monolithic were actually made up of predictable subgroups with over 600 percent variation in their likelihood to file a claim. 9
Lemonade emerges in the video as a pioneer in the application of AI and
BDA. This is a narrative that is targeted just as much at investors as consumers. In a reversal of the direction of investment capital, insurtechs’
business model is reliant on inward not outward investment. Securing this
initial funding and ongoing capital investment requires a persuasive storyline. Lemonade’s storyline secured a unicorn valuation and the doubling
of their share value on the first day of trading even though the company,
after 5 years in business, was loss making and a very small player in its core
markets (Ralph 2020). The claim that more granular, risk-based pricing will
the major industrial companies had dwindled or disappeared, spectacular
collapses notably Equitable’s in 2000, all combined to increase the industry’s vulnerability and intensify the branding challenges it faced. Huge city
centre buildings and the messages they conveyed about solidity, heft, and
permanence were no longer well adapted to the practice of insurance or to
reassuring customers. If anything, they added to a sense of insurance as a
lumbering, impersonal, and conservative industry.
This contrasts sharply with the kinds of messages insurtech start-ups want
their brands to convey. Across the insurtech landscape brands are designed
to be lighter, livelier, and friendlier. Brand names include Friendsurance,
Brolly, Oscar, Spixii, Hippo, and Lemonade. These are brands that are
not so much interested in impressing their solidity on consumers but their
agility, informality, and technique. Lemonade, Inc. offers an example of
how this works. Formed in New York in the same year Aviva opened its
garage, Lemonade offers home, renters, and more recently, pet insurance.
It was launched on the stock market with an Initial Public Offering (IPO)
in July 2020 7 . In a video published on YouTube in the run-up to the IPO,
one of the founders, Daniel Schreiber, introduces a series of word association customer vox pops – insurance is ‘boring,’ ‘complicated,’ ‘a rip-off,’
‘like a trigger word,’ and ‘evil.’ Schreiber cuts in to explain that Lemonade’s
founders wanted ‘to create an insurance company with an entirely different
word cloud associated with it – a lot of people talk about Lemonade as being
delightful, aligned, socially impactful, words like trust and love, those are
the kinds of words that consumers have come to associate with Lemonade 8 .’
Customer delight is linked to the company’s broader proposition of using
machine learning, predictive data, and fast growth to transform insurance.
Lemonade claims that their facility with data allows them to adopt a microscopic approach to risk.
At twenty data points much of humanity looks alike so you price and
underwrite large numbers of people as if they are a uniform, monolithic
group but we found that the data we were gathering, that hundred X
digital zoom we have, it showed us that groups our competitors seemed
to consider to be monolithic were actually made up of predictable subgroups with over 600 percent variation in their likelihood to file a claim. 9
Lemonade emerges in the video as a pioneer in the application of AI and
BDA. This is a narrative that is targeted just as much at investors as consumers. In a reversal of the direction of investment capital, insurtechs’
business model is reliant on inward not outward investment. Securing this
initial funding and ongoing capital investment requires a persuasive storyline. Lemonade’s storyline secured a unicorn valuation and the doubling
of their share value on the first day of trading even though the company,
after 5 years in business, was loss making and a very small player in its core
markets (Ralph 2020). The claim that more granular, risk-based pricing will