Israeli-founded insurance tech firm Lemonade announced that it entered into an agreement to buy US digital insurance platform MetroMile to boost its new auto insurance offering, a product the company announced just last week.
The acquisition deal is for an all-stock transaction on an equity value of approximately $500 million. San Francisco-based MetroMile, founded in 2011, is a car insurance company that uses data science and AI to offer personalised insurance policies by the mile. MetroMile also licenses its technology platform to insurance companies around the world.
Lemonade made its first foray into the nearly $800 billion global car insurance market last week when it unveiled Lemonade Car, a new service that leverages telematics, a field that combines telecommunications and informatics, to measure how much people drive, and how safely they do so, to provide better rates for safe and low-mileage drivers, the company said. The app will also offer real-time crash detection, access to 24/7 roadside assistance, and the ability to dispatch emergency services.
Drivers of hybrid and electric vehicles (EVs) are set to get special discounts on their car insurance, as will existing users of Lemonade’s other insurance offerings.
Also Read: What’s Driving The Automotive Industry?
Lemonade has been making waves in the traditional insurance industry since 2015 when it was founded in Tel Aviv by Schreiber and Shai Wininger, also a co-founder of Fiverr. The company uses technology such as AI and chatbots, as well as behavioural economics, to deliver affordable homeowners, renters, life, and pet insurance across the US, all via a mobile app. Some of its offerings are also available in Germany, the Netherlands, and France.
Lemonade claims its simplified claims process and rates — it offers renters insurance starting at $5 per month, and homeowners insurance starting at $25 per month — resonates strongly with younger consumers. With Lemonade Car, the company said it aims to provide better rates based on how consumers drive.
“The target audience is anyone underserved by the current car insurance industry,” said Wininger. “By pricing based on how much and how safe you drive, Lemonade Car will be able to provide better prices – and fairer prices- rather than how it’s currently done. Also, we’re looking at our current Lemonade customer base- homeowners, renters, pet owners, etc. who can now bundle their insurance with Car, get discounts, and get all their insurance needs from one place.”
