We’ve all heard of the Kodak moment; when a new technology gets widespread adoption (eg. the digital camera) and customer expectations and needs change so dramatically from your assumptions that it becomes too late to change and you’re left filing for Chapter 11 bankruptcy (eg. Kodak). Many analysts appear to be waiting with baited breath for the Kodak moment to happen in shipping, and although I believe it will happen to someone at some point, I’m far more interested in the industry having its lemonade moment.
It was a cold, winter’s evening in NYC and Brandon had lost his coat. Not just any coat, but a $979 Canada Goose Langford Parka. Instead of doing what most people do in that situation (swear at themselves and lament the loss of the coat), Brandon took out his phone and opened the Lemonade app – he entered some details about the coat and then recorded a video of himself describing what happened. It took about the same amount of time and effort as sending a tweet. What happened next broke a world record and fundamentally changed the insurance industry.
Brandon submitted his insurance claim at 17:49 and 7 seconds. The seconds matter. It had taken Brandon less than two minutes to fill out his claim, and there was no paperwork – that’s unheard of in insurance, but it’s not record-breaking. By 17:49 and 10 seconds something remarkable had happened: Brandon’s claim had been paid. In those three short seconds Lemonade’s claims bot, A.I Jim, had reviewed his claim, checked it against his policy, run 18 anti-fraud algorithms, approved it and sent wiring instructions to the bank. It took you longer to read the last sentence.
A.I Jim is the artificially intelligent incarnation of Lemonade’s Chief Claims Officer. At the time the claim was processed, the real Jim was on his way home for the Christmas weekend; he is an experienced claims handler who looks into claims that A.I Jim cannot process on its own. Not all claims are processed in three seconds, but the combination of artificial and human intelligence makes for a powerful team which is never offline.
Like many people, I would expect a premium level of service like this to cost considerably more than regular insurance but on average Lemonade costs just a fifth of what regular home insurance in New York costs. What happened in New York that night fundamentally shifted Brandon’s expectations of the insurance industry – he will never go back to the reams of paperwork, hours on the phone, and high premiums that we tend to associate with insurance, and he’s not alone. Just a few months after they launched, Lemonade had overtaken the incumbents in New York to become the fastest growing insurance provider in the state; in April 2017 they captured a whopping 27% of market share among new buyers of home insurance.
Lemonade doesn’t do P&I or Hull & Machinery insurance and I highly doubt they ever will. But what Lemonade represents is the ability for technology to fundamentally shift the way an industry works for the better. In shipping, there are literally thousands of “Lemonade” opportunities out there; from broking and insurance to port services and crewing to name just a few. It’s definitely not a case of if shipping will have a lemonade moment, it’s when and I for one can’t wait to see it happen.