Lemonade first made headlines when it raised $480 million for its homeowners and renters insurance solutions. The company is making news again after announcing that they are branching out into a new insurance vertical: pet insurance.
The company has yet to release several important details about this new product. We still don’t know anything about price or types of coverage, but Lemonade has made it clear that the coverage will be exclusively for dogs and cats.
According to Lemonade founder and CEO Daniel Schrieber, 70% of current Lemonade customers are pet owners. That presents a big market opportunity for the insurer, particularly because only one to two percent of pet owners in the United States currently have an active pet insurance policy.
The market seems primed for a popular provider like Lemonade to shift into pet insurance given that Americans seem to be spending a lot more money on their pets than they used to. According to TechCrunch, Americans spent roughly $75 billion on their pets in 2019 alone.
Schreiber spoke with TechCrunch about his company’s pivot into the pet insurance space. “Health insurance for pets dates back to over 100 years ago,” said Schreiber. “It started with horses in the Netherlands, and the heir to that pet insurance is actually car insurance. Horses were a mode of transportation, and the insurance was meant to protect you if something happened to that mode of transportation. But pets are now members of the family.”
Lemonade made a name for itself by creating homeowners and renters insurance policies that were transparent enough for the average consumer to understand. The company utilizes a chatbot to help users through a robust on-boarding process and is able to deliver an accurate quote in about a minute.
Lemonade also entices customers through it’s charitable contribution feature. This feature allows Lemonade to take its revenue cut on a monthly basis, and takes the rest of the unclaimed value and donates to a customer’s preferred charity at the end of the year.
The company plans on taking the same approach with pet insurance. They have confirmed that their pet insurance offerings will use the same chatbot onboarding process, charitable contribution feature and policies will be written in clear and easy to understand language.
Lemonade has yet to release a concrete timeline for when these pet insurance policies will come to market. However, they are already allowing people to sign up for early access so it’s not unreasonable to conclude that the pet policies will be available to the general public in the not-to-distant future.