Lemonade: Delighting Insurance Customers with AI and Behavioural Economics - A Disruptive InsurTech Business Model for Outstanding Customer Experience and Cost-Effective Service Excellence (Russian)

This case explores InsurTech start-up Lemonade’s disruptive new business model aimed at creating and delivering a ‘shockingly great user experience’ around a ‘lovable brand’ – in an industry plagued by low customer satisfaction. The digital disruptor leverages principles of behavioural economics to address conflicts of interest and mistrust which prevail in the existing industry. It uses digital technologies to automate, accelerate and manage an impressive amount of work – with few employees – thereby reducings customer effort and , increasing customer satisfaction to achieve cost-effective service excellence. The effortless experience is aggressively priced and relies on a flexible subscription-based pricing model. Artificial intelligence (AI), data and machine learning are key in the race to achieving data parity with incumbents. The case culminates in Lemonade’s filing for an initial public offering (IPO) and asks where growth should come from next: incremental improvements, further expansion across the United States, global expansion beyond Germany and the Netherlands, or from new types of property.

This versatile case allows students to explore how digital disruption is impacting the insurance industry and understand the digital transformation of the customer experience (CX). They deep dive into the key building blocks and performance metrics of Lemonade’s innovative business model, with a special emphasis on AI, data and machine learning. It allows a discussion of how principles of behavioural economics come to life in an insurance setting and beyond, and demonstrates a hands-on approach to the design of the CX and customer-journey mapping in a digital context, such as job-to-be-done analyses, means-end laddering, and service blueprinting.