Fresh-Squeezed Insurance

Lemonade is a startup that offers crowdfunded, “peer-to-peer” property insurance via a smartphone app. When people hear about it, they often have two reactions — which can come like a one-two punch, says CEO and co-founder Daniel Schreiber.

- Leonard Brody

The first response is the sort of “wow” that can arise when a new idea jolts the entrenched way of doing business — the kind of wow that greeted Amazon, eBay, Kickstarter, Uber. Peer-to-peer insurance — what a novel concept!

Then comes the second thought: Wait a minute. Insurance always has been crowd funded. Benjamin Franklin formed America’s oldest mutual insurance company in 1752. Everyone would pay money into a pool, and if your house caught on fire, you were covered. Both reactions are legitimate, Schreiber says.

“We talk about Lemonade being the oldest new idea in insurance,” he said. “Insurance in the time of Benjamin Franklin was spiritually along the lines of what we’re doing. Now there’s a lot of technology, a lot of behavioral sciences, that were not available to them.”

In our series called “The Great Rewrite” we’ve been examining elemental shifts in business and society. The rules of how we thrive and interact are being rewritten in ways that transcend traditional business innovation. 

One fundamental rewrite in many markets really is a rediscovery: the revival of community as an economic force. The sharing economy that brought eBay, Kickstarter, Uber and Airbnb is enabled by technology but driven by the essential human impulse to connect. In Franklin’s day, Schreiber points out, it may not have been unusual for a homeowner to take in a stranger as a guest. Hotels made that tradition feel antiquated and risky. Technology has allowed it to return.

“Airbnb is using technology to re-facilitate a social mode of interaction that once prevailed and had been lost,” Schreiber said.