Lemonade, the insurance company that uses artificial intelligence and behavioral economics, plans to add car insurance to its current renters, homeowners, pet, and life insurance offerings in the U.S.
The insurtech announced it is readying what it calls Lemonade Car for launch within the year. It is inviting customers to register early.
This is the company’s third expansion into a major new insurance category in less than 12 months. The company started with homeowners products, adding pet insurance in the second half of 2020, and term life insurance in the first half of 2021.
The move into auto insurance has been expected. In announcing its life insurance agency last fall, Chief Executive Officer Daniel Schreiber acknowledged analysts regularly ask when it will sell auto and hinted it was coming.
The company plans to offer customers the option of bundling their home, pet, and life policies with their car insurance.
The U.S. car insurance industry is estimated to be about $300 billion—70 times the size of both the renters and the pet insurance markets. Lemonade said a “large majority” of its existing customers are car owners, and they already spend about $1 billion on car insurance each year.
Shai Wininger, Lemonade chief operating officer and co-founder, said Lemonade Car will “use technology to handle emergencies and pay claims fast, will offer great prices to safe drivers, and will be especially attractive to drivers” of electric vehicles.
Lemonade has defended the use of artificial intelligence in insurance against claims it can be unfairly biased against gender, racial and ethnic minorities. Schreiber last year argued that “algorithms we can’t understand can make insurance fairer” in a blog post titled, “AI Can Vanquish Bias.”
According to Schreiber, everyone wants to be assessed as an individual, not by reference to racial, gender, or religious markers. “If the AI is treating us all this way, as humans, then it is being fair. If I’m charged more for my candle-lighting habit, that’s as it should be….,” he wrote
This content was originally published here.