Lemonade Insurance Company

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Lemonade Insurance Company
Private public benefit corporation
FoundedApril 2015; 4 years ago (April 2015)
New York City, United States
FoundersDaniel Schreiber (CEO) & Shai Wininger (President)
Headquarters5 Crosby Street, ,
Area served
Arkansas, Arizona, California, Connecticut, Washington, D.C., Georgia, Iowa, Illinois, Indiana, Maryland, Michigan, New Jersey, New Mexico, Nevada, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, and Wisconsin
ProductsHome & Renters Insurance

Lemonade Insurance Company is an American property and casualty insurance company headquartered in New York City offering renters and home insurance policies for homes, apartments, co-ops and condos[1] in many US States and in Germany.

Operating in the fintech sector, Lemonade created a new business model for insurance based on behavioral economics and technology.[2] The company uses artificial intelligence and chatbots to deliver insurance policies and handle claims for its users on desktop and mobile (through its iOS and Android applications) without employing the use of insurance brokers. Social good is another aspect of the business model, where underwriting profits go to nonprofits of the customers’ choice, in the company's annual “Giveback.[3]

Lemonade Inc., the parent company of Lemonade Insurance Company, was founded by Daniel Schreiber and Shai Wininger in April 2015, Lemonade launched its insurance company on September 21, 2016 in New York City.[4] As of January 2019, Lemonade offers renters and home insurance policies in Arkansas, Arizona, California, Connecticut, Georgia, Iowa, Illinois, Indiana, Maryland, Michigan, New Jersey, New Mexico, Nevada, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, Washington, D.C., and Wisconsin[5] and in Germany.[6]

Lemonade Inc. is backed by investors including Aleph, General Catalyst, GV (formerly Google Ventures), Sequoia Capital, Thrive Capital, XL, and Japanese tech investor SoftBank, having raised $120 million as of December 2017.[7]


Lemonade was founded by veteran tech entrepreneurs, Daniel Schreiber (former President of Powermat) and Shai Wininger (Co-Founder of Fiverr), in April 2015.[8] While the two founders were relative newcomers to the insurance industry, they viewed it as an untapped opportunity given its $4.6 trillion market size and relative lack of technological innovation.[9]

As one of the least trusted sectors of the U.S. economy, insurance ranks extremely low in all customer satisfaction categories.[10] With this in mind, Schreiber and Wininger set out to create a new insurance model that would change up the industry's misalignment of incentives towards consumers while promoting social good by focusing on behavioral economics and transparency.[11]

Key personnel[edit]

Daniel Schreiber is Co-Founder and CEO of Lemonade. In his previous position as President of Powermat, Schreiber oversaw its transformation into an industry standard and a default feature in the world's foremost smartphones (Samsung Galaxy), venues (Starbucks) and cars (GM).[12] Prior to Powermat, he served as SVP Corporate Marketing at Sandisk, with global responsibility for the company's social media, press relations, 50 web and ecommerce sites and major rebranding.[12]

Shai Wininger is a veteran tech entrepreneur and inventor; Lemonade is Wininger's seventh startup.[13] Wininger is the Co-Founder and "Chief Lemonade Maker" at Lemonade and is currently a Board Member at Fiverr which he co-founded in 2009. Wininger also co-founded Mobideo Aerospace (2005), Handsmart Software (2003), DailyDo (2000), Trimus Inc. (2000), and Ananas Group (1991).[13]

Duke University professor, author and economist, Dan Ariely is Chief Behavioral Officer at Lemonade with much of his research on behavioral economics integrated into the DNA of the company, in pursuit of transforming the adversarial relationship between client and company.[14] Ariely is tasked, in part, with helping design systems and processes that ensure that the interests of the insurer and the insured are aligned.[11]


In December 2015, Lemonade Inc. announced that it secured $13 million in seed funding from Sequoia Capital and Aleph.[8] In August 2016, Lemonade Inc. raised $13 million in funding from XL Innovate (part of XL Group), followed by a $34 million Series B funding round in December of the same year.[15] The Series B round was led by General Catalyst with participation from Thrive Capital, Tusk Ventures, and GV (formerly Google Ventures), the VC arm of Google's parent company Alphabet Inc.[16]

In April 2017, the company announced additional investors: Allianz SE and Ashton Kutcher’s Sound Ventures. In December 2017, Softbank invested an additional $120 million in Lemonade in a Series C round, increasing the total money raised by the company to around $180 million.[17]


A full-stack insurance company, Lemonade underwrites its own policies and is reinsured at Lloyd’s of London.[18]

Lemonade’s financial stability is rated A-Exceptional, by Ohio-based financial analysis firm Demotech.[19]

Business model[edit]

Lemonade’s business model differs from that of typical insurance companies; Lemonade keeps a flat 25% fee of a customer’s premium while setting aside the remaining 75% to pay claims and purchase reinsurance.[20] Unclaimed premiums go to a nonprofit of the user’s choosing in an annual “Giveback.”[21]


Lemonade uses artificial intelligence in the form of chatbots and machine learning to provide insurance policies and handle claims, replacing brokers and paperwork traditionally associated with the process.[22] When a customer applies for insurance, the company's software pulls data and cross-references information about a particular home or neighborhood from a variety of sources.[20] Policyholders file claims through Lemonade's app with the company's chatbot ‘A.I. Jim’ who reviews the claim, cross-checks it with the policy, runs 18-fraud algorithms, and determines whether or not to approve the claim.[23]

In 2016, a customer filed a claim for a stolen coat; after answering a few questions on the app and recording a report on their iPhone, Lemonade's claims bot set a world record by reviewing, approving and paying the claim in three seconds.[23]

Behavioral economics[edit]

Lemonade uses behavioral economics research to displace fraud and conflict while aligning interests to remove motivation for not paying claims and keeping the inclination to defraud an insurer in check.[2] Integration of these principles are found in Lemonade's policy purchase and claims processes, with users signing their name on a digital pledge of honesty at the start of the claims process - rather than the end - and speaking into a camera to file a claim rather than using forms.[24] The company is also applying principles of behavioral science to itself, publishing articles on data surrounding customer growth, and bank account balances, among other topics.[25]

Social good[edit]

Lemonade Inc. which is registered as a public benefit corporation, has a stated mission of ‘transforming insurance from a necessary evil into a social good." This includes the Giveback, the charity component of the business model which is also an attempt to mitigate fraudulent insurance claims.[20] Upon signing up for Lemonade, users select a nonprofit or charity that will receive payouts on an annual basis from the unclaimed premiums (also known as underwriting profit) of their respective cohort.[26]

This annual donation is known as a “Giveback.”[21] Companies chosen by Lemonade users include: Charity: Water, Citymeals-on-wheels, New Story, Robin Hood Foundation, Women in Need (WIN), ACLU, American Red Cross, Code to Inspire, Evolve Creative Alliance, Feeding America, Make-a-Wish Foundation, MEET - Middle East Entrepreneurs of Tomorrow, New York Society for the Prevention of Cruelty to Children, Teach for America, and The Trevor Project.

In May 2016, Lemonade became one of the only insurance companies to receive B-Corporation certification.[27]


Within the first 48 hours of launching in New York in 2016, Lemonade reported that 36,000 people visited their site, 140 of whom purchased policies equating to $14,300 in gross written premiums.[28] After the first 100 days, the company released a follow-up report noting that 2,000 people had signed up for Lemonade, with over 80% of this statistic composed of first-time insurance buyers.[23] By June 2017, 14,315 customers had signed up for a Lemonade insurance policy.[29]

Lemonade was recognized as one of the NYC startups ready to take on 2017, by Inc.[30] It was also recognized as one of the top 25 tech companies to watch, by the Wall Street Journal.[31]

See also[edit]


  1. ^ "Lemonade Insurance Review 2017 - NerdWallet". NerdWallet. 2017-08-02. Retrieved 2017-08-09.
  2. ^ a b Fromm, Jeff. "How Startup Lemonade Is Redefining Insurance For Millennials". Forbes. Retrieved 2017-08-09.
  3. ^ "The Lemonade Giveback & Social Good | Lemonade". www.lemonade.com. Retrieved 2018-05-31.
  4. ^ Covert, James (2016-09-22). "Peer-to-peer insurer Lemonade launches in New York". New York Post. Retrieved 2017-08-09.
  5. ^ "Where's Lemonade Available in the US and Europe? | Lemonade". www.lemonade.com. Retrieved 2019-01-14.
  6. ^ "Lemonade Launches in Europe". www.businesswire.com. 2019-06-11. Retrieved 2019-09-28.
  7. ^ "Plasmonics startup receives $1 million from venture capital firm". Physics Today. 2013. doi:10.1063/pt.5.027153. ISSN 1945-0699.
  8. ^ a b Shieber, Jonathan. "Sequoia Invests $13 Million In A Seed Round For Lemonade, Which Is Looking To Transform Insurance | TechCrunch". Retrieved 2017-08-09.
  9. ^ "How Lemonade's founders raised a massive seed round just by talking". Business Insider. Retrieved 2017-08-09.
  10. ^ Ey (2014). "Reimagining customer relationships -Key findings from the EY Global Consumer Insurance Survey 2014" (PDF). ey.com.
  11. ^ a b Shieber, Jonathan. "Still Stealthy, New Insurance Company Lemonade Continues To Impress With New Hire, Dan Ariely | TechCrunch". Retrieved 2017-08-09.
  12. ^ a b "Daniel Schreiber - CEO, Co-Founder @ Lemonade | crunchbase". www.crunchbase.com. Retrieved 2017-08-09.
  13. ^ a b "Shai Wininger - Co-Founder, Chief Lemonade Maker & President @ Lemonade | crunchbase". www.crunchbase.com. Retrieved 2017-08-09.
  14. ^ "A top psychologist says insurance sucks, so he's joining a startup to fix it". Business Insider. Retrieved 2017-08-09.
  15. ^ Lemonade. "Lemonade Announces Additional Funding by XL Innovate". www.prnewswire.com. Retrieved 2017-08-09.
  16. ^ "Google participates in Lemonade's $34M round". Business Insider. Retrieved 2017-08-09.
  17. ^ "Lemonade Raises A $120M Series C, Softbank's Fourth Investment Into A Property Startup". www.crunchbase.com. Retrieved 2018-05-20.
  18. ^ "Leading Reinsurers Line Up for Lemonade, the P2P Insurer". Insurance Journal. 2016-02-09. Retrieved 2017-08-09.
  19. ^ "Financial Stability Ratings®: Demotech". www.demotech.com. Retrieved 2017-08-09.
  20. ^ a b c Moodie, Alison (2017-01-28). "How artificial intelligence could help make the insurance industry trustworthy". The Guardian. ISSN 0261-3077. Retrieved 2017-08-09.
  21. ^ a b "How is Lemonade Different Than Mutual Insurance?". My Money Blog. 2017-04-10. Retrieved 2017-08-09.
  22. ^ "Lemonade are Live. Insurance will never be the same again!". www.the-digital-insurer.com. Retrieved 2017-08-09.
  23. ^ a b c "A New York startup shakes up the insurance business". The Economist. Retrieved 2017-08-09.
  24. ^ "Lemonade Is Using Behavioral Science To Onboard Customers And Keep Them Honest". Fast Company. 2017-03-17. Retrieved 2017-08-09.
  25. ^ "Finding Transparency in the Insurance Industry | Lemonade Blog". Lemonade Blog. Retrieved 2017-08-09.
  26. ^ Shieber, Jonathan. "Less exciting than Beyonce's album, but maybe more rewarding, Lemonade launches new insurance plans | TechCrunch". Retrieved 2017-08-09.
  27. ^ Lynn, Jordan. "Major disruptor Lemonade in double industry first". Insurance Business. Retrieved 2017-08-09.
  28. ^ "Lemonade: The First 48 Hours in Insurance". www.lemonade.com. Retrieved 2017-08-16.
  29. ^ "Lemonade Updates on Platform Growth. Adds 14,300 Customers in 8 Months". Crowdfund Insider. 2017-06-01. Retrieved 2017-08-09.
  30. ^ "17 NYC-Based Startups Ready to Take On 2017". Inc.com. 2016-12-25. Retrieved 2017-08-09.
  31. ^ Graphics, WSJ com News. "Top 25 Tech Companies to Watch". WSJ. Retrieved August 9, 2017.