Lemonade Insurance Company, with a peer-to-peer coverage model, entered the insurance scene in April of 2015. Since their launch, more than one Lemonade Insurance review has praised the company for shaking up the industry and offering customers a unique experience. Their eye-piercing pink branding, the influx of 9-figure investors, a company who is working to revolutionize the insurance policy itself from our 5 inch screen; Lemonade Insurance is a name that has been buzzing in tech and insurance for over 2 years now. Working with chatbots and AI, and their ability to captivate the millennial audience through various marketing tactics has made a lot of people in insurance very nervous – from carriers to brokerages.
We didn’t have to look very hard to find serious complaints stacked up against the company. Between unanswered accusations and a lack of human interaction, Lemonade Insurance has left many of their customers with a sour taste in their mouth.
Some insurance brokers view Lemonade as a threat. Others aren’t bothered by the company. But smart brokers are taking the time to learn about Lemonade, including what they’re doing right and what they’re doing wrong.
Millennials Drink the Lemonade
There is one thing Lemonade Insurance does amazingly well. They can market their tails off. What helps them stand out against their competition is that they market around three main brand characteristics.
- They’re affordable. With monthly premiums starting at $5, they make insurance look and feel affordable.
- They embrace technology. Today’s market thrives on convenience. Lemonade policies can be purchased entirely online or through their app.
- They care. Lemonade donates a portion of their profits to charities selected by their customers.
Do you know what demographic eats these types of brand traits for breakfast? Millennials. And with millennials representing one quarter of the population, that’s a whole lot of renters and homeowners insurance policies up for grabs. Lemonade experienced massive initial growth and ended 2018 with $57 million in revenue.
Lemonade sells. We can’t argue with that. But when it comes to reviewing claims or addressing other service needs, customers say no one is actually manning the virtual lemonade stand.
Reviews on Yelp show the discontent customers feel. On April 11, 2019, Felix R. wrote, “It takes a minimum of 2 days to get in touch with a human when you need it.”
On January 9, 2019, David B. wrote, “I am a current Lemonade customer in the middle of a claims nightmare. The sign-up process was simple. But watch out if you need to file a claim – that ENTIRE process is a nightmare.”
Even worse, Lemonade Insurance is not accredited by the Better Business Bureau. With 30 complaints filed against them and failure to respond to four of those, Lemonade Insurance Company has earned an F rating.
Sure they can sell it, but it doesn’t look they can retain it and in insurance we know that’s where you make your money.
What Brokers Can Learn
If Lemonade customers knew the benefits of working with a broker, they may not have fallen for Lemonade’s marketing tactics.
While Lemonade policies are suggested and sold through algorithms by a chat bot named Maya, working with a broker ensures there’s a human being on the other side of a policy making sure customers get the right amount of coverage for the best price.
But Lemonade’s initial success means they’re doing something the market loves, and history shows the insurance industry hasn’t always adapted to the calls for change from the market.
So, while some brokers might continue down the traditional path of insurance, others can break into new territory by combining what’s working for Lemonade and preventing the pitfalls customers are complaining about. Here are some suggestions.
Don’t complicate it
Lemonade makes it easier than ever to secure homeowners or renters insurance. Policies can be secured in minutes and all online. Studies and surveys have shown that Millennials want instant gratification, including when it comes to customer service. Are you embracing technology to make the insurance process easier for customers? Consider utilizing online forms, online claim submittals, and automatic email replies.
Lemonade makes insurance fun. Lilli S., a Lemonade customer interviewed by the company for their blog, had this to say. “I like how Lemonade relays information in creative ways. It makes things that could be boring, like setting up your policy, feel more like taking a short BuzzFeed quiz.”
Insurance can be dry, so find opportunities within your content and delivery to make it seem like less of a chore and more of a collaboration with customers.
Be available but not overbearing
Lemonade clients are a bit indecisive. They want the ability to purchase insurance on their terms (e.g., in the middle of the night and without talking to anyone) but they also want lightning quick answers to their questions. Maya, the Lemonade chat bot, walks Lemonade customers through the purchasing process by making suggestions and answering common insurance questions in real time.
Brokers can imitate this through utilizing live chat on their websites and including easy to spot links that take visitors to informational pages.
Brand and market smarter
Lemonade is the perfect example of effective and uniform branding. They know where to find their target audience and by consistently pushing their three core brand messages, customers respond.
When asked how she discovered Lemonade, Lilli S. said, “I saw an Instagram ad for it… it looked like a lot of people my age were using it. I was like, ‘this seems pretty easy.’”
Brainstorm your own core brand messages and deliver them consistently and effectively. Find where your target audience is. Make sure you’re recognizable and approachable and the rest will fall into place.
Are Lemonade-Esque Models a Legitimate Concern?
Lemonade’s initial success has made it clear. Insurance tech and fintech competitors can’t be written off by industry professionals.
This means that yes, today’s brokers should consider Lemonade and similar companies that may follow a legitimate threat. The market has responded in their favor. Right now, their future is uncertain. If they’re unable to address current complaints and prevent future issues, brokers can probably sit back and wait for customers to joyously come back to a more traditional broker and insured relationship.
But if Lemonade or a similar competitor can find the proper balance of convenience, affordability, and customer service, brokers could be in trouble.
For today’s insurance brokers, it’s not about fighting off the competition. It’s about imitating their strengths and avoiding their shortcomings.
Lemonade isn’t the enemy. In fact, it’s revealing what the market expects from the insurance industry.
Brokers who take this Lemonade Insurance review to heart will be able to prevent the extinction of their profession. Learn from Lemonade by embracing the demands of today’s market without sacrificing the human connection insurance needs.