Carrier vs. Carrier Comparisons
Seldom does a start-up company enter a massive, entrenched industry and achieve customer satisfaction scores on par with a perennial customer choice award winner. USAA, only available to military members and their families, is consistently ranked by its policyholders as the highest rated personal lines insurance company in the U.S. It was founded in 1922.
Lemonade Insurance Company, founded less than five years ago in April 2015 by Daniel Schreiber and Shai Wininger, has done just that. With an intense and well-publicized commitment to the customer experience, Lemonade’s customers have provided feedback resulting in a rating on par with USAA.
Enabled by a user friendly front-end interface, Lemonade has won over its customers in a big way, while competing against established, multi-billion dollar insurance brands such as USAA and State Farm (also founded 1922).
Its customers rate Lemonade as the No. 1 ranked renters insurance company in the U.S. out of 300 plus rated renters insurance companies.
According to its customers, Lemonade seems to be on the path to creating the insurance industry’s first “easy button” for buying and servicing insurance.
Based upon customer feedback, rating all aspects of its customer value chain, Lemonade has earned the distinction of the most innovative insurer of 2019. No other insurance company has developed the technological capabilities and service culture as a new market entrant and within such a short period of time.
Lemonade’s Net Promoter Score® of 79% is the second-highest of the 67 companies with a minimum of 100 reviews on Clearsurance. Only USAA, at 80%, has a higher NPS.
On average, Clearsurance reviewers use words associated with ease 15% of the time in reviews about their insurance experience — a staggering 44.5% of Lemonade Insurance reviews used words describing ease. Additionally, about twice as many Lemonade reviewers, 28%, mention speed, compared to an average of 16% for the 511 other U.S. insurance companies reviewed and rated on Clearsurance.
Unencumbered by legacy systems and technical debt, Lemonade has been able to reimagine and recreate what customers report to be a pleasant and simple insurance experience. Given that most consumers don’t want to spend a second more than necessary thinking about their insurance, this bodes well for the future of Lemonade — and insurance as well.
In this new age of digital consumerism dominated by Amazon.com, people increasingly expect that shopping for, buying, and using (claims) insurance should be a much less painful customer experience.
Some industry skeptics validly point out that Lemonade has yet to show an operating or underwriting profit, but that misses the bigger picture in the same manner that Amazon’s skeptics focused on its profitability, even as it has continued to grow its top line revenue and customer base at astonishing and unprecedented rates.
Like Amazon with its tunnel vision on the retail customer experience, Lemonade’s laser focus on the insurance customer experience has been game changing and will reverberate. Already, household insurance brands are replicating Lemonade’s front-end quoting capability to make it much less painful than it needs to be in the digital age.
Of the more than 200 Lemonade reviews on Clearsurance, 92% of policyholders have said they are likely to renew their policies, 95% would recommend to a friend, and 94% report a positive claim experience.
Compare that to USAA, with nearly 6,000 policyholder reviews, and the numbers are strikingly similar, albeit on a much smaller scale: 93% are likely to renew their policies, 94% would recommend to a friend, and 94% report a positive claim experience.
These customer satisfaction metrics are simply unparalleled in the U.S. personal lines insurance industry. Granted, USAA is operating in multiple product lines, at a larger scale, and has many more reviews. Lemonade, however, has only been in business less than five years.
While no one can predict whether Lemonade will become the Amazon or Uber of insurance, it’s clear from its customer feedback is that it has shown the ability to execute a world class customer service experience in a complex industry, within a stunningly short period of time. As a result, Lemonade has already elevated the service experience for all insurance consumers.
Hundreds of millions of dollars in financial backing from investors such as Softbank has certainly helped Lemonade grow quickly. However, money without a vision, a relentless customer-first strategy, and a team and culture that can execute, is only money. Lemonade is competing against established industry behemoths with exponentially more resources but maybe without the same intensity, devotion and commitment to the service experience.
Whether the industry likes it or not, Lemonade is leading in setting the pace for innovation and elevating the insurance customer service expectations for what the insurance industry’s products and services should look like in 2019. Don’t take our word for it, the customer review and rating data speaks for itself.
Disclosures: Lemonade is a Basic (Free) Subscriber to Clearsurance, along with 149 other insurance providers. Lemonade is also a Clearsurance affiliate supplier, which simply means that users can click a link to obtain a quote from Lemonade. Clearsurance gets paid if a user clicks through to obtain a quote. Every free subscriber to Clearsurance has the ability to publish links to quoting and/or “find an agent” calls to action.
Based upon 140,000 customer reviews on Clearsurance, Progressive, Metromile, Hippo and Root were also considered for the most innovative insurer of 2019. Each of these companies, much like Lemonade, are recreating the customer experience through technological and cultural innovation. Lemonade’s customer data, especially its NPS score and retention data, stood out amongst all companies considered for the “2019 Most Innovative” designation.