Auto market a ‘substantial opportunity’ for post-covid Lemonade – GlobalData | Latest news
Lemonade has a “substantial opportunity” to capitalize on the auto insurance market after the pandemic, according to data and analysis firm GlobalData.
GlobalData citing the U.S. auto market worth $ 35,815 million in gross written premium (GWP) in 2020, the insurtech model – which is designed to be both digital and value-driven – is well suited to capitalize on this opportunity.
Ben Carey-Evans, Insurance Analyst at GlobalData, said: âThe US market is relatively competitive for digital and telematics auto insurance. In recent years, companies such as Root and Metromile have received huge funding in this area, making them both insurtech unicorns. “
This follows Lemonade’s announcement earlier this month that it is entering the auto insurance market.
Meanwhile, GlobalData UK Insurance Consumer Survey found that a more flexible and digital auto insurance policy, like the one Lemonade is likely to offer, could be even more relevant in the wake of the Covid-19 pandemic.
It found that more than two-thirds (69.4%) of respondents said they would drive fewer kilometers per year due to the pandemic.
Therefore, consumers could benefit from pay-per-mile insurance policies offered by By Miles and Metromile, as value and flexibility will become essential.
Carey-Evans added, âLemonade will bring to the market a wide range of digital expertise and very strong customer service skills.
âThe launch of Lemonade Car is [its] early stages and while it hasn’t released many details yet, it has promised to deliver instant claims and value, while also focusing on EVs.
âThis looks like a great upselling opportunity for Lemonade, a company that primarily sells fast, digital home policies to their clients.â
Brand awareness is essential
The consumer survey also found that only 7% of UK consumers had heard of lemonade. This is not a problem at the moment as the company is launching in the United States, but it has made clear its intentions to locate in Europe over the past two years, with insurtech selling home insurance in Germany, France and the Netherlands.
Brand awareness will be essential as insurtech seeks to challenge established market players. However, strong support makes him a hurdle he can overcome with marketing, as his digital expertise is expected to prove popular, GlobalData noted.