Lemonade CEO Puts Challenge To Traditional Car Insurers

Lemonade recently announced it is moving into car insurance. Some interesting comments by Schreibe, CEO Lemonade, about the sector:

"There’s going to be massive dislocation in this entire sector...the data implications are profound and they aren’t good for incumbent insurers. All of the pricing of insurance until now has had to look at big groups of people in aggregate...As soon as you can break apart that average … that monolith... and price people using specific data to them, you have a massive advantage that incumbent insurers don’t like"

Morgan Stanley recently advised in a note to investors:

“We expect to see over the near to medium term, with rather few exceptions, that all auto OEMs (not just Tesla) will offer auto insurance services directly to their customers on their connected vehicle platforms."

This will not happen over night. Nonetheless, it is on the way! The scope for global deals (eg Swiss Re, MunichRe, Allianz) rolled out market by market is big! How will the incumbents respond? They are not sitting still. Great to see some "innovation" pressure. In Australia, Tesla has partnered with IAG’s Poncho Insurance. 

Source: The Driven