Lemonade is one of the companies in the insurance space that appears to be making remarkable efforts in the adoption of artificial intelligence technology. In fact, it utilizes bots and artificial intelligence (AI) in the selling of insurance policies. Recently, it announced that it had rewritten its insurance policy. By doing so, Lemonade said it made the policy simple and relevant as well as in plain English.
For many years, insurance companies have stuck to their long and monotonous jargon in their contracts, which makes it hard for customers to understand by themselves. For instance, Lemonade’s insurance policy is a document made up of over 40 pages and hard to comprehend. However, for a company that seeks to make the purchase of insurance policies customer-centric and easy, they needed to do something about the product they sell to their customers. This issue led lemonade to rewrite its entire policy.
According to Lemonade, the new insurance policy, Policy 2.0, will be accessible for edits, which makes it the first-ever open-sourced insurance policy. The company’s cofounder and chief executive officer, Daniel Schreiber, said that when they embarked on creating an unconflicted insurance entity, they had to rethink the existing insurance business model. As such, the company started by working on its foundational document, which best displays its commitment to spearhead insurance into the 21st century by all means necessary.
The new easy to read and understand policy allows Lemonade’s clients to know what their insurance covers and what it does not. Lemonade is open-sourcing the document on GitHub, whereby anyone including consumer advocacy groups, state regulators, interested customers and even competitors can make their contributions and edits. What’s, more the insurance company is allowing the use of the insurance policy by other insurance providers thanks to GNU’s Free Documentation License.
This move by Lemonade is contrary to the expectations of many since most companies in the insurance space copyright their policy to prevent duplication by competitors. Although rewriting the document from scratch is driven by the need to promote transparency for insurance customers, it is also part of Lemonade’s larger agenda to simplify insurance. According to Schreiber, the company’s intentions include providing customers with a policy document that can be understood even on their five-inch mobile phone screen.
When asked whether there have been any concerns regarding the company’s move to rewrite its policy in plain language, Schreiber cited that abandoning a language that has been used in legal realms welcomes legal uncertainty. Nevertheless, he added that optimizing the document for consumers provides them with clarity into what the document contains and what it leaves out.
Regulators, however, pose a challenge to the policy. A great deal of the language in the 10,000-word document is not required by law to be in the policy. For this reason, Lemonade will have to work closely with regulators in a bid to sell the policy. Worst case scenario, this issue differs from one state to another. Due to this impediment, Policy 2.0 could be available for purchase in 2019.