Lemonade Insurance business model for getting 250K +customers

Updated on 29th May 2019

You may have heard of Lemonade insurance company which has grown to a 250K+ customer base since its launch. Continue reading this article and we will tell you about Lemonade insurance business model and how you can do something similar for your insurance agency.

They mainly sell Homeowners and Renters insurance and have captured huge market share in just a few years. 723,030 was the number of New Yorkers with renters insurance, and Lemonade had sold way more than 70,000 renters policies .

https://www.lemonade.com/blog/lemonade-insurance-crazy-market-share/

 

How Lemonade Insurance works

There are mainly 2 major reasons behind their phenomenal success.

1. AI based Chatbot for automation –

   Their business is conducted entirely online via Chatbot. There are no human insurance brokers. Maya, the chatbot asks you in plain English a few simple questions to “get you some great insurance”.

2. Unique business model:

   Lemonade takes a straight 20% cut of the policy rate as its share. And if you pay in more than your group uses as claims for the year, Lemonade donates the money to a charity of your choice 

 

What can Insurance Agencies learn from Lemonade insurance business model and case study?

Insurance Agents/Agencies and Brokers may not be able to change their business model as they are dependent on Insurance carrier for selling their insurance products. But they (Insurance Agents/Agencies and Brokers) can automate their Insurance operations and exponentially scale up their business similar to what Lemonade did.

 

Digitalizing Insurance agency operations via AI Chatbot is the key to success

How is Lemonade Insurance generating it’s website traffic?

There are many websites which you can use for competitor analysis but in this article we will use www.similarweb.com .

Let’s type lemonade.com in the search bar of similarweb.

You will see that they had close to a million visitors on their website in last 6months.

Let’s see break up of traffic generated by Lemonade insurance

As you can observe most of their traffic after direct source is coming from Search and Social. We cannot do much about their direct traffic but we can definitely analyze how they are getting their search and social traffic.

Search traffic for Lemonade Insurance

 

Once we analyze keywords your competitor is ranking we can identify which ones are relevant for your business. For example Lemonade.com is ranking organically for keyword “Engagement ring insurance”. If you bid for this keyword in AdWords (for paid search) then it will cost you between $5 to $18 per click. Else you can write a in depth article on “Engagement ring insurance” and try to rank yourself organically, this is also known as SEO (search engine optimization).

For more detailed keyword analysis you can use Semrush.com or Moz.com, they have free tools which are good to start with.

If you visit Lemonade.com then you will see that they have written lot of articles targeting keywords which customers are searching. You can also start writing articles and optimizing your pages to rank on google and attract relevant customers.

Want to learn more about SEO (search engine optimization) ? Check out this masterclass

Lemonade Insurance traffic via Social Media

Let’s look at social media traffic which Lemonade.com is attracting.

You can see that almost 63% of their traffic is coming from Facebook and their 2^nd best channel from social media perspective is Quora. Honestly, I was surprised when I saw Quora 2^nd in this list but that’s the beauty of this analysis, it helps you find hidden gems.

 

Based on similar data for your competitor you can prioritize which social media channel you should spend more time and effort.

We did some more digging and found that one of the facebook ads which Lemonade.com is running is retargeting ads like one below.

How to run retargeting ads for Insurance agency:

Retargeting ads help you to show an advertisement to people who visited your website. You can achieve this by placing Facebook pixels on your website. Once someone visits your website they are tagged by pixel. This allows you to run ads on audience based on facebook pixels. For us, these are one of the best converting ads .

Whether you plan to run ads or not adding Facebook pixel on your website will allow you to understand your audience better.

Referral Traffic for Lemonade Insurance

Source:Similarweb.com

Lemonade.com is getting lot of traffic from other referral websites. There is a good opportunity for you to work out a deal with these websites and drive some of that traffic your way.

 

How can Chatbot help Insurance Agents/Agencies and Brokers?

Currently Insurance agents try to connect with their customers by sending postcards/mails/emails or phone call. These methods are time consuming and in some cases not very effective. Emails have open rate of less than 5% , mails and postcards have a low response rate and customers prefer getting a message instead of a phone call.

Nowadays we connect with people on social media like facebook, twitter etc, we use messaging apps, we google out things. Hence insurance agencies should be connecting with their customers on these platforms.

 

We connect with almost everyone via messenger then why not our Insurance Agent ?

 

Some of the examples mentioned below will help you in understanding how Chatbot can help in automating operations for insurance agency

 

• Facebook/online Ads

  “Send to Messenger” feature can be used while running facebook ads and when customer responds to it Chatbot will get engaged. Chatbot can collect customer information and answer their queries.

 

• Google Adwords

  You can run Google ads for terms which insurance customers search for like “How to get Home Insurance”. Again, when customer respond to your ad, a Chatbot can be leveraged to automate process and increase customer engagement.

 

• Barcode on marketing material

  You can put QR code or Facebook Messenger code on your marketing material or postal mails. Customer can scan this using their smartphone and instantly start interacting with your agency via messenger.

 

• Link on your site /FB page

  Your website may be getting lot of organic traffic and you can monetize it more efficiently by having “Send to Messenger” option. When customer clicks on it they will be talking to your insurance agency via messenger and you can use Chatbot to automate this interaction.

You can not only generate more leads but also service existing clients via Chatbots

As per research more than 50% of customers want to connect with businesses using messenger and they what business to be available 24/7.

 

What are the business benefits of using Chatbots for Insurance Agency?

 

Increase Sales

• Chatbot as Automated Insurance agent can help in increasing sales exponentially
• Bot can capture basic information needed to generate a quote and respond to queries

Cost Reduction

• Chabots can be used for reducing operational cost  via  automation.
• Adding a Bot is much cheaper and can perform multiple tasks

Faster Response

• Once given the right command, chatbot will do whatever it required almost instantly.
• Bots can, let’s say, automatically provide quote or may recommend various products

Bots can multitask

• Bots can perform multiple tasks or even handling multiple clients seem easy.
• This could result in no waiting time. This would eliminate voicemails and emails which requires follow up. Instead a Bot at can be there at your disposal for your every task.

No time restrictions

• Chatbots are available 24/7 they can perform any task instantly and effectively with precision day or night.

 

How can Friendly Agent help you?

• We have ready to install Chatbots for multiple lines of businesses which can be configured based on your business need
• We can create Chatbot specific to your business needs
• Run marketing campaigns using online channels like Facebook Ads/ Google ads.

 

Setup your free Success call with our team and figure out how you can take your Insurance Agency to next level.