Lemonade is on a mission to “transform insurance from a necessary evil into a social good.” This quote from the app’s website really says it all with assertiveness and certainty.
Lemonade isn’t all talk either — its charitable donation of $1,128,109 in 2020 alone provides an impressive amount of evidence to support this statement.
For those who are unfamiliar with this company, here’s a little backstory. The company, which launched in 2016, presents a forward-thinking and user-friendly alternative to traditional insurance. Lemonade allows users to manage renters, home, and pet insurance seamlessly through their smartphones. By “employing” chatbots and other elements of artificial intelligence, it provides unparalleled assistance in terms of precision and promptness. The company also highly values transparency and providing data to its customers. This component is one that can be critically missed in older methods.
Insurance That Gives Back to the Community
Lemonade also features a program in which they “Giveback” to charitable causes its members care about.
Insurance companies collect monthly premiums, which they use to pay out claims and run their business over the course of a year. The total sum of premiums is typically higher than the amount the company needs for claims and overhead, so that money becomes profit. Lemonade works differently.
As a customer of Lemonade, you get to pick a cause you’d like them to donate your leftover premiums to. That’s right, policyholders get to choose a Giveback cause when they sign up for insurance. Those who pick the same cause form an invisible ‘cohort.’ Each cohort’s premiums are used not only to pay their claims, but also, Lemonade gives back any unspent, leftover money (up to 40% of premiums) to their shared charitable cause.
The company tallies the numbers in July, and sets the donations on their way. Thanks to this inventive business model, having insurance is a way to give back to your community. All in all, Lemonade gives customers a few ways to feel good about insurance for the first time maybe ever.
Not only can users support diverse and meaningful causes that protect the environment, civil liberties, and more, they can also choose to donate unused premiums to animal-centric causes, which is especially appealing for pet parents who insure their cats and dogs with Lemonade.
“The Lemonade Giveback model isn’t traditional philanthropy, nor a ‘corporate social responsibility’ program; it’s the result of an unconflicted business model – where giving back brings out the best in us all,” said Daniel Schreiber, Lemonade CEO and cofounder, when speaking about the initiative. “Giveback shares the good will and good fortune of our community, and we’re deeply gratified our model and our community have proven to be so impactful for charities worldwide.”
In an interview with Forbes, Schriber further explained the company’s devotion to social good, saying “There’s an inherent conflict of interest in traditional insurance: every dollar insurance companies pay out in claims is a dollar less to their bottom line. This creates a misalignment between insurers and their customers, bringing out the worst behavior in people. By introducing a third party—a charity—into our model, we are hopefully building a system that brings out the best in people. Us and our customers. We never want to be in conflict with our customers, and never want to make money by denying their claims.”
To learn more about Lemonade and its plans for changing the future of insurance, check out the website here. Insurance doesn’t have to be scary or hard to navigate — Lemonade is here to flip the script.
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