News for hackers. Stuff that matters.

A comment on Show HN: Lemonade – the world's first P2P insurance company. Parent comment

Re:Show HN: Lemonade – the world's first P2P insurance company by nerdponx on Wednesday September 21, 2016 @07:02PM (#12553041)
They're not adding 20%, they're charging you a flat 20% and then paying for the policy on the back-end.

In that sense, it's like a buyers club for insurance. Lloyd's isn't insuring every Lemonade customer individually, they're insuring the entire Lemonade business, which with enough buy-in becomes a very diversified risk pool.

[ Parent | on HN ]
Re:Show HN: Lemonade – the world's first P2P insurance company by h4nkoslo on Wednesday September 21, 2016 @07:14PM (#12553107)
I'd be really surprised if their entire risk was reinsured; that tends to lead to severe incentive misalignment since they would have every incentive to sell to the riskiest customers they could find.
[ Parent | on HN ]
Re:Show HN: Lemonade – the world's first P2P insurance company by nerdponx on Thursday September 22, 2016 @12:49AM (#12554452)
Good point. Although again, adverse incentives on Lemonade's side are supposedly handled by the fact that they're a nonprofit.
[ Parent | on HN ]
Re:Show HN: Lemonade – the world's first P2P insurance company by SmellTheGlove on Thursday September 22, 2016 @01:42PM (#12558615)
I'd be really surprised if they could get reasonable terms to reinsure their book, good decision or not.
[ Parent | on HN ]
Re:Show HN: Lemonade – the world's first P2P insurance company by gilsadis on Wednesday September 21, 2016 @07:10PM (#12553085)
that's well said!
[ Parent | on HN ]