Lemonade IPO reiterates ‘need for insurance market shift’

News that insurtech  Lemonade has filed to complete an initial public offering (IPO) to raise $100 million has prompted one insurtech leader to question recent findings that support for this area of the insurance industry may be waning.

Tim Hardcastle, CEO and founder of INSTANDA, highlighted the Willis Towers Watson Quarterly Insurtech Briefing for the first three months of 2020, which found that insurtech funding had dropped by more than half during Q1. He said that while this was “unsurprising”, in the current climate, Lemonade’s IPO reveals something else.

According to Hardcastle, the IPO offers an underlying message to the insurance industry - that the financial markets believe there are better ways to deliver insurance products and services.

He said: “Lemonade embraces technology to bring more flexibility to the industry, delivering diversified products tailored to individual needs. Incumbents, meanwhile, have traditionally been held back by clunky legacy IT systems that often cause delay in responding to customer needs. The positive news is that there are a number of flexible digital solutions out there for insurers, to enable them to embrace this new way of delivering appealing products.”

He added that his company “advocates that every insurer can and should have the flexibility of Lemonade, to deliver a seamless customer experience and the products that they know consumers need”.

“Lemonade’s forthcoming IPO is therefore a strong market signal to insurers globally to the value of insurance, when it embraces flexibility, agility and operational efficiency.”