Allianz Invests in US Fintech Insurer Lemonade
April 25, 2017 by Renée Kiriluk-Hill
MUNICH – Allianz has made a strategic investment in U.S. fintech property/casualty startup Lemonade, saying a partnership supports its digital focus.
“Changes in the digital age occur in an exponential way. We need to look out for early signs of disruptions, recognize patterns and use these insights to build our customer solutions,” said Allianz SE Chief Digital Officer Solmaz Altin in a joint statement.
Lemonade is “looking to improve the insurance value chain and it is seeking to use technology-driven efficiencies to redefine an insurer’s role in its community,” he added. Terms of the investment were not released.
According to Lemonade Chief Executive Officer and Co-founder Daniel Schreiber, the deal is a “strong statement of faith and it goes a long way in aligning interests.”
Schreiber founded Lemonade with Shai Winnenger in 2015 and started offering direct homeowners and renters in New York in September 2016. By year’s end it had filed for licensing in 46 more states and the District of Columbia and has since expanded to Illinois.
Lemonade keeps 20% of premium and said the remainder pays for reinsurance and claims, with anything leftover on a yearly basis donated to causes, from local PTA groups to national nonprofits,chosen by each policyholder.
The giveback concept creates networks of peers, Schreiber said earlier, and should reduce fraud. He said the flat-fee model prevents temptation to delay or deny claims (Best’s News Service, Dec. 22, 2016).
Altin described Lemonade as a small company confronting a large and challenging market in the United States. “There are potential synergies and our partnership will allow us to explore our joint potential over time,” he said.
Allianz Chief Executive Officer Oliver Bäte earlier called digital a major challenge for the insurance industry and the wider society. He said his company continues to develop digital capabilities at group and country levels (Best’s News Service, Feb. 17, 2017).
Most operating entities of Allianz SE currently have a Best’s Financial Strength Rating of A+ (Excellent).
(By Renée Kiriluk-Hill, associate editor, BestWeek: Renee.Kiriluk-Hill@ambest.com)
