[hellomyguys]

Not disagreeing that is part of the strategy, but also it is worth thinking how much overhead there is in the insurance industry. How many offices are there nationwide? How many of the jobs are essentially basic data ingestion? Approving of claims? How much is spent on advertising?

Probably a fair amount of fat to trim.

[twic]

Hard to put together VC-sized returns out of trimmed fat.

[adventured]

> Hard to put together VC-sized returns out of trimmed fat.

That depends on how large the industry is, what its cost structures look like and how price sensitive it is.

A small, persistent cost advantage can be enormous in the insurance industry.

You're also saying that in a thread about a company that just produced VC-sized returns and is IPO'ing. Your premise clearly doesn't follow, as most VCs invest early and will exit with an IPO like this. The primary question going forward with Lemonade is for public shareholders and whether the company can get a lot bigger in the future. The VC-sized returns were already generated for the early VCs.

[ryanianian]

As a fairly happy user, it's not clear to me how Lemonade solves these problems and ultimately ends up making money by trimming margins.

They still market heavily, and I presume they paid well for their (pretty good) branding.

When I applied there was a wait between applying and having coverage: an amount of time I suspect correlated to a human having to review materials.

My local market has weird insurance regulation, so I had to reach out for customer-service to ensure coverage which wasn't explicitly in the policy. The regulation and compliance department of any insurance company is likely rather large and expensive and rather difficult or risky to offload to AI.

I haven't had to make a claim, but I get the strong opinion that automated claim approvals are basically a function of claim amount and claim history. Anything over $X or for your Nth claim still involves a human at least as a gatekeeper. The AI may be real, but it seems strongly like the usual "fake it till you make it" AI that lots of companies claim to have but are actually 'mechanical turks'.

[erichurkman]

Does anyone know what an insurance agent makes? If I go to my local State Farm office to get a home owners policy, what is the cut that goes to the local office/agent?

[aianus]

$800 commission for a $50/mo life insurance policy. You have to pay the commission back if they cancel within a year.

Can’t really offer a source but I heard it from an insurance broker personally.

[gen220]

It's generally quite low, but it depends on a large number of factors, and varies a lot market to market. It's generally a couple percentage points of your monthly premium, per month.

An agent generally needs a couple hundred paying policies to be in the black.

[phonon]

10% or so to the agent. Everyone makes money on the renewals (your "book").

[dmurray]

You can make a guess based on rent and salaries. Those aren't amazing businesses, probably the median one nets a few grand per month.