Will drivers permit an insurance coverage firm to trace their each transfer?
Lemonade thinks so, and on Wednesday the agency added auto insurance coverage to its portfolio of current renter, dwelling, pet, and life insurance policies. The twist: it should set charges by detailing drivers’ fast begins, quick stops, and exhausting turns by means of satellite tv for pc monitoring.
Pedal to the Meddle
Lemonade, which began publicly buying and selling final 12 months, intends to construct its automotive insurance coverage providing round telematics, a GPS expertise that screens drivers on the highway by means of smartphone apps or gadgets of their automobiles.
Lemonade will maintain tabs on exhausting braking, rushing, hours of journey, distances pushed, and, presumably, distracted driving. These elements — somewhat than conventional credit score scores, age, or gender — will probably be used to set particular person insurance coverage charges. It is already out there in Illinois, and can quickly be rolled out to different states.
Whether or not or not shoppers will drink up stays to be seen, however it’s clear why Lemonade needs a chunk of the $288.4 billion US auto insurance coverage market:
- After lifting off final 12 months when it was a buzzy choose amongst Reddit merchants, Lemonade’s inventory has fizzled in 2021, falling over 40%.
- Within the second quarter, Lemonade misplaced $55.6 million, greater than double a $21 million loss one 12 months earlier, as advertising and marketing, tech, gross sales, and administrative prices devoured its backside line.
Tough Street Forward? Lemonade cautioned in a current SEC submitting that it has a “historical past of losses and we might not obtain or preserve profitability sooner or later.”