Insurance as Lemonade

Allianz invests in Israel-based player Lemonade. This was big but not surprising industry news last week, and Accenture has Lemonade on the radar since it was founded last autumn. In fact, Lemonade might be the world’s most-hyped Insuretech company of today. Allianz strategic investment makes it time to take a sneak behind the hype and try to understand how Lemonade is innovating the traditional business model of property and casualty insurance.

The traditional P&C insurance business model, put simply, is to compensate their customers for their loss or damage in specified events and to take monthly premiums from their customers in return. Without any loss event actually occurring, this business model would apparently be a very profitable one. This potential profit is partially eaten up as soon as the customer files a claim, and the insurance company grudgingly pays the contractually agreed compensation. Each customer claim adversely affects the P&C insurers business case and the key metric of combined ratio, which figures the total claims cost as a percentage of premium income. This is why claim settlement usually involves a lengthy process with the insurer examining if all contractual conditions are really met by the customer.

Did Psychographics Make Trump President?

Arguably, one of the most spectacular marketing successes this year was the election of Donald Trump. Many are still puzzled how such awkward candidate could win. End of last year, a Swiss magazine offered an interesting, but daunting explanation: London-based marketing and data service provider Cambridge Analytica's huge analysis of American voters' social data, the Psychographic profiling of millions, and the corresponding micro-targeting advice to Trump's campaign team was decisive for the tight victory.

Cambridge Analytica's alleged involvement in the Brexit campaign and Steve Bannon as board member certainly make the story a thriller. While it is not possible to prove or disprove the claim without access to the corresponding data (and there are quite some doubts in place), the interesting message is: Social Data powered Psychographics could have made Trump President; and it will without a doubt be key to target and convert individuals in the future. This is why I put Psychographics as first P in the 10P of Digital Marketing.