i3 - September/October 2017 - 28

Mobile
Sales
On the
Rise
Consumer spending via mobile will
increase from $204b
in 2014 to $626b in
2018. Almost half
of all e-commerce
sales will be from
m-commerce.

$204B

$626B

2014

2018

SOURCE: Ernst & Young

Traditional insurers will realize Lemonade is highly disruptive in five
years when they discover waves of first-time home buyers, who already
bought Lemonade's tenant insurance policy and likely will buy homeowners policies from them as well. It's the Lemonade lock-in.
As of June 1, 2017 Lemonade is active in three states - California,
Illinois and New York - representing 22 percent of the U.S. population.
But the company is now licensed in an additional seven states - Arizona,
Michigan, New Jersey, North Carolina, Rhode Island, Texas and Virginia
- representing another 26 percent of the U.S. population. Once
Lemonade is actively selling in these seven new states it will be serving
48 percent of the U.S. population - very close to achieving the corporate
goal of offering insurance to the majority of Americans by the end of 2017.
As of June 1 the company had sold 14,315 policies and the average
policy size is growing. This means that Lemonade is moving up in the
market, selling higher premium homeowner policies.
In the most recent period for which the company disclosed sales, it
sold 4,300 policies in 20 days in New York, Illinois and California.
Annualized this is a run rate of 78,500 policies a year. When Lemonade

LEMONADE

28

SEPTEMBER/OCTOBER 2017

COMPETITOR

AVERAGE

$22.17

$21.42

$17.80

$16.25

In the insurance race,
Lemonade's prices
prove 68 percent cheaper
on average.
The largest homeowners'
insurance companies offer different entry-level coverage, with
rates to match. This chart compares their total monthly fees
with Lemonade's, for equivalent
coverage of the same renter.

begins operations in the next seven states
that it's become licensed to operate in,
it will be selling 160,000 new policies
a year if the run rate holds constant.
Lemonade wrote $179,855 of insurance
in the first 100 days to December 30, 2016.
Extrapolating this to Lemonade's sale of
14,315 policies by May 31, 2017, means that
the company sold more than $2.1 million
in premiums. (The company won't release
any figures beyond what it has already
published on its blog and transparency
chronicles. But as the average policy has
been growing due to the average homeowner's policy size growing significantly,
this figure is conservative.)
Lemonade is on an exponential growth
trajectory, more than doubling the number

71%
$6.50

Allstate

$11.42

77
51

$5.58
State Farm

$5.00
Liberty Mutual

68

66
$5.58

CHEAPER

$5.70

Farmers

SOURCE: Lemonade
I T I S I N N O VAT I O N

Previouse spread and photograph courtesy of Lemonade

The Cost
Advantage

Daniel
Schreiber,
Co-Founder and
CEO (left), and
Shai Wininger,
Lemonade
Co-Founder
and President
(right).



i3 - September/October 2017

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