The US-based insurer Lemonade this week announced it was expanding its partnership with Aviva in the UK, launching a new home insurance offering.
The Building and Contents product includes home emergency, accidental damage, theft and loss, and legal protection.
Lemonade launched in the UK in 2022 and now describes the country as one of its fastest growing markets.
Daniel Schreiber, Lemonade CEO and co-founder, said: “The UK has proven to be an exciting market for us with a large digitally-savvy population who appreciate an easy, personalised experience.”
Founded in 2015, the brand offers rental, home, car, pet and life insurance through its app. The company has over 2 million customers, although it does not break down how many of these are in the UK.
It has two main selling points – the first being its usage of automation to reduce paperwork and speed up onboarding and customer service. It aims to provide ultra-fast quotes and payouts.
The second is its sense of social purpose: a certified B-Corp, the brand gives unused premiums to non-profits which are chosen by its community of customers.
The question for the firm is how much these features can cut through. The firm is still loss-making, although it expects to break even in terms of cash flow by the end of 2024.
The UK insurance market is dominated by price comparison websites (PCWs), with 90% of customers visiting PCWs when choosing insurance and competition heavily centred on offering the lowest possible price. Even long-time hold-out Direct Line finally added products to PCWs earlier this month.
CEO Schrieber has previously commented that PCWs are bad for consumers and the industry due to having a flattening impact and reducing customer service innovation.
Amazon attempted to enter the UK insurance market in 2022, trying to solve the main pain points around buying insurance, including by reducing the list of questions required to generate a quote. It launched with partners including Ageas, Co-op and LV= General Insurance. However, the service was shuttered after less than 18 months.
