Lemonade has made great strides in the world of insurance. The company uses AI and bots to sell insurance, and toppled the business model to make sure that Lemonade never clashes with customers who file insurance claims.
But the product itself, the actual insurance policy, has not changed much. For decades, insurance companies have been held long and tedious legalese in their insurance contracts. In the case of Lemonade, the document is over 40 pages long and is incredibly difficult to understand.
For a company that wants to make sure that buying insurance is as easy and as consumer-centric as possible, the very product that it sells is completely opposed to that. That's why Lemonade rewrote politics from scratch.
"I am a recovering lawyer and have been clean for 20 years," said Daniel Schreiber, CEO and co-founder of Lemonade. "I think my English is pretty good, and I have a fleeting knowledge of insurance and, in general, I do not understand this insurance policy.To do the next big thing in the Insurance means changing insurance.This has not been done for generations.This is a historical document that has been optimized around lawyers. "
So Lemonade has rewritten it all to read it as a blog post. Policy 2.0, according to Schreiber, aims to give consumers a clear and easy way to understand what is covered by their insurance policy and what is not.
But, in a little something, Lemonade is opening the policy on GitHub. Anyone, from state regulators to consumer advocacy groups through Lemonade's competitors or even interested customers, can make changes and contributions to the policy. In addition, Lemonade opens the policy's use to other insurance providers under the GNU Free Documentation License.
Part of this concerns transparency for consumers, but another part simply relates to Lemonade's larger mission of simplifying insurance.
"We sold you a font on your phone," said Schreiber. "We want a policy that makes sense on a five-inch screen."
I asked Schreiber if it was possible to rewrite a policy in clearer language, while historically, lawyers use specific language to stay in the realm of legal precedent and remove gray areas that may be challenged.
"Whenever you give up a language that has been litigated for years, you are inviting legal uncertainty," replied Schreiber. "But we think that if you optimize for the consumer, by giving him clarity on what is covered and exactly what is not, you will not feel cheated if we can not cover things because you will see that you have this information all along, in plain English. "
An obstacle, however, will be regulation. Much of the wording of this 10,000-word insurance policy is legally required to appear in the document. This Lemonade change requires the company to work with the regulators to allow the sale of the new policy, and this conversation differs from one state to the other.
That is why Schreiber believes that the 2.0 policy will not be available for purchase until 2019, deployment at the state level as it is approved by regulatory agencies.
That said, Schreiber says he's already in conversation with the regulators and that he sees a willingness to be flexible about it.
When Strategy 2.0 arrives at the main stage, current Lemonade subscribers will be able to immediately switch to the new policy or keep their original policy.
Lemonade raised a total of $ 180 million, including a whopping $ 120 million run by SoftBank from December.