Lemonade taps into Aviva to bring its next-gen insurance platform to the UK

New York-based insurance giant Lemonade officially launches in the UK, its fourth market in Europe and fifth overall, with the help of one of the oldest and largest insurers in the UK.< /p>

Lemonade, for the uninitiated, burst into the trillion-dollar insurance space in 2015, with a new vision for how consumers should be able to buy insurance. Mobile-focused, AI-powered automation for registering and filing claims was the name of the game, compared to dusty old brokers and bureaucracy.

In addition to this, the company has always expressed its ethics, positioning itself as the antithesis of a traditional insurance company; the company is B Corp certified, which means it is independently assessed for its social and environmental performance. Its business plan is basically to charge a flat fee and then donate a portion of its underwriting profits to a charity selected by each customer when they sign up.

Lemonade UK Launch< /p>

But Lemonade is still a for-profit insurance behemoth, having secured nearly $500 million in funding as a startup, from major backers such as SoftBank, Alphabet's GV, Sequoia Capital and Allianz. The company hit the public markets amid the pandemic two years ago, and as with many digital cloud companies during the lockdown years, its shares have soared, with the company reaching a market capitalization of more than 10 billion at one point – more than tripling its initial public valuation – before crashing back down to Earth. The company's valuation is now below $1.5 billion, reflecting a broader insurtech downturn that has hit many companies hard.

Most recently, Lemonade made its first acquisition by buying car insurance start-up Metromile, before quickly laying off around 20% of its staff. A sign of the times, perhaps.

And all that fuss brings us to today, where Lemonade is now officially open for business in the UK, where it will go to market with a slightly smaller offering compared to what it offers in the US. Indeed, in its home market, Lemonade offers insurance covering contents (renters), owners, pets, car and life, while in Germany, the Netherlands and France where it has been extended in recent years, it is limited to content insurance.

For the UK market, Lemonade offers contents insurance from £4 per month and includes worldwide cover for personal items up to a value of £2,000 each up to a total value of £100,000. Customers may pay additional fees for additional coverage, such as accidental damage to mobile devices.

While Lemonade is an insurance company in its own right, the company has formed a strategic partnership with Aviva, one of the UK's largest general insurers. At first, this might seem like an odd pairing given that they're essentially competitors, but it makes sense. Lemonade is the tech-focused young upstart looking for help to scale in a lucrative new market, while Aviva is the $11 billion incumbent with roots dating back over 300 years, looking to exploit a population younger. And the first fruits of this partnership will see Aviva become Lemonade's reinsurance partner.

“We share a common vision of how digital, AI and data can transform customer experiences, and the role insurers can play in building stronger communities,” said Adam Winslow, CEO of Aviva UK and Ireland IARD, in a press release. "In our 325th year, its...