Daniel from Lemonade here. Totally understand how P2P can be confusing as a term. What we mean by it is that we use each group's premiums to pay their claims, with leftover money going back to the group's common cause. To us P2P is a shorthand for: 'it's not our money'!
Show HN: Lemonade – the world's first P2P insurance company
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Re: Show HN: Lemonade – the world's first P2P insurance company
#22Earlier quoted context omitted.
Not sure how to answer your question directly but perhaps you're missing a bigger point. The price and ease of use difference compared to legacy companies is huge.
Was not criticizing the company at all, just wondering why it calls itself P2P and whether my payback model would work.
Daniel from Lemonade here. Totally understand how P2P can be confusing as a term. What we mean by it is that we use each group's premiums to pay their claims, with leftover money going back to the group's common cause. To us P2P is a shorthand for: 'it's not our money'!
Re: Show HN: Lemonade – the world's first P2P insurance company
#23I don't understand the P2P claim either, but I'll upvote anything involving Dan Ariely.
Re: Show HN: Lemonade – the world's first P2P insurance company
#24It looks like these are the companies that are really insuring you:
Lloyd’s of London, Berkshire Hathaway’s National Indemnity, XL Catlin etc.
Basically they are buying a policy from one of those companies adding 20% and selling it to you.
A insurance company works by spreading risk over a large area. By selling everything in NY they are increasing their correlation which raises risk. One of the reasons for the sub prime crisis was no one expected housing to fall in all markets at the same time.
Re: Show HN: Lemonade – the world's first P2P insurance company
#25This is wildly un-new. Mutual insurance companies have existed for literally hundreds of years. Oldest one I can find in 5 minutes dates to 1762, and if you include merchant insurance organizations, probably https://en.wikipedia.org/wiki/Mutual_insurance
https://en.wikipedia.org/wiki/The_Equitable_Life_Assurance_S...
Re: Show HN: Lemonade – the world's first P2P insurance company
#26>A transparent 20% fee to run everything how does that compare with the profit margins of a traditional insurance company?
Very different market but the the ACA has a Medical Loss Ratio rule that requires insurers to spend 80% of premium dollars on care and thus caps admin costs + profits at 20%. (http://kff.org/health-reform/fact-sheet/explaining-health-ca...)
I find that an interesting coincidence in this case...
Re: Show HN: Lemonade – the world's first P2P insurance company
#27Re: Show HN: Lemonade – the world's first P2P insurance company
#28How is this more "P2P" than other insurance companies are? Non-profit, yes, but the mechanism seems to be the same. There is still a central pot everybody pays into. I would like a non-profit that just pays back the spare money even more. I do not know how this would work with regulations. I guess in Germany this could be done through a "Genossenschaft", which Wikipedia tells me has an US equivalent called co-op. Wou…
According to the video ("The Science Behind Lemonade") linked on the homepage, it seems the key difference is this company take a flat fee while other insurance company "makes profit" from declining claim , so the Lemonade has no incentive to decline a claim which makes the claim process fast; and also they donate the extra profit to charity
... extra profit donated? Why would I choose that over lower prices?
Re: Show HN: Lemonade – the world's first P2P insurance company
#29How is this more "P2P" than other insurance companies are? Non-profit, yes, but the mechanism seems to be the same. There is still a central pot everybody pays into. I would like a non-profit that just pays back the spare money even more. I do not know how this would work with regulations. I guess in Germany this could be done through a "Genossenschaft", which Wikipedia tells me has an US equivalent called co-op. Wou…
According to the video ("The Science Behind Lemonade") linked on the homepage, it seems the key difference is this company take a flat fee while other insurance company "makes profit" from declining claim , so the Lemonade has no incentive to decline a claim which makes the claim process fast; and also they donate the extra profit to charity
That doesn't sound right -- a claim should be paid out or denied based on the veracity of the claim, not on the profit motive of the company. Sure, a for-profit company has extra incentive to vet claims, but so does Lemonade (since they dont want to be swindled).
Traditional insurance companies make their margins on the cash they have to hold on hand.
Re: Show HN: Lemonade – the world's first P2P insurance company
#30Cool concept, looking forward to seeing roll out. Under your definition of p2p would heyguevara.com not fall into this too?
The difference is that we're a fully regulated insurance company (as opposed to brokers like Guevara or other p2p insurance startups). It means that we can control the experience end to end and build an insurance company with a different business model than how traditional insurance companies do business. This is why we can give unclaimed money back to charity.