Lemonade Car UPDATE (what we know and ONE BIG question)

In this video, I discuss what we know so far about Lemonade's car insurance product and one major question that I have. LMND.

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[endeuinable]

We appreciate your continuous monitoring of Lemonade evolution as a company.

[rorykelly]

I think Lemonades decision to delay feedback until 6 months is smart; they are effectively trying to make their customers forget that they are being monitored and therefore reducing the possibility of the Hawthorne Effect. Tesla is pretty much bragging about the Hawthorne Effect which may be beneficial in the short term, but I think people's true behavior tendencies and habits will surface when stress and certain situations eventually distract them from the fact that they are being observed.

Anyways, great video. I appreciate your analytical approach to evaluating companies.

[TypoDiabetes]

I think it's important that they collect data specifically on how customer's respond to negative feedback. If they can gradually roll out what works and what doesn't then they can harness that feedback tool better to their advantage.

[lightinspace]

Thanks, lots of interesting information in this video. Personally I think adjusting the rate monthly might be too often (wouldn't want to think about my car insurance each month). It sounds like they take a careful approach to this and I think that is a good thing. Also, giving good feedback on driving behavior that is truly helpful using only sensor data might be tricky. It might already help a lot that the customer knows that at renewal, more careful driving will give lower rates.

[moonwalker]

Another thought- a big reason why I feel lemonade will be more profitable than legacy with car insurance is because they will be able to separate the wheat from the chaff in terms of understanding which are good drivers they want on their books versus ones that will result in losses. A 6 month time frame not utilising data gives bad drivers 6 months to crash. Reduce that time period by half and at scale you can substantially lower the number of losses incurred from new customers in the first 6 months as you can raise pricing much sooner and encourage them to move to another provider before they cost you.

[michaelhunter]

Thanks for all the lemonade content!!!

[ekapob.universe]

David Friedberg said this in an interview (I couldn't remember which one): The most important factor contributing to safety is how much you drive.

[ShaulGoral]

My bet is on the developing/testing the product explanation. The other reasons don't seem reasonable to wait 6 months.
Really makes me want to go work there, so I can find out :)

[GetGooder]

Awesome video man!!!! Love what you were talking about on this one!!

[moonwalker]

Cheers great to get an update here. On the 6 month wait - I guess their AI / ML have virtually no data at this point with which to price accurately so a 6 month wait would enable them to gather that. Once metromile is on board that changes drastically and they will be able to underwrite confidently with a much smaller data set. I'm curious to see whether they adopt metromiles approach of pricing based on miles driven. I got the feeling from last earnings call they weren't definitely opposed and may adopt it but with slightly higher rates as metromile priced themselves to low to be profitable. Also interested to hear their go to market strategy.

[matthias]

How do they actually tracking driving behavior? What do / can they track? Did you find out?

[dorjbayar]

My average is 71$ with 30 shares. Thinking to buy another 30 shares to average down.

[ninobach]

What do you think about making the feedback optional?