Insurance Company Tries Out New Charitable Social Experiment, Donates $53K in the First Year
Lemonade is a property and casualty insurance company that uses technology and transparency to create an insurance experience that they claim is “fast, affordable and hassle-free.”
After claims are processed, insurance companies will typically take any leftover money from premiums as a profit. Lemonade wanted to give its customers the option of donating that money towards charity—thus they came up with Giveback. With Giveback, Lemonade “aims to donate unclaimed premiums once a year in a ‘Giveback’ to discourage fraud,” according to TechCrunch.
Lemonade recently donated $53,174, which amounted to 10.2 percent of its revenues from Giveback’s launch in September to June 30. As of June 30, the organization reported that 21 cause-centric groups received a Giveback and 14 of those groups had the average Giveback of 18 percent of its members’ earned premiums.
According to Daniel Schreiber, founder of Lemonade, “it’s common practice for homeowners and renters to file claims at inflated values and to keep granted claims even when stolen of missing items turn up. All of this bad behavior accounts for billions in lost revenues across the industry and creates an adversarial relationship between people and their insurers.”
TechCrunch reported that Schreiber noted that the idea behind Giveback “wasn’t about being generous—it’s business.” He recalled two customers who voluntarily returned money for stolen goods that were recovered.
“The good news for Lemonade is that the company doesn’t need every single user to be altruistic—a few bad actors doesn’t ruin the experience for everyone. The Lemonade team is closely monitoring claims and keeping its fingers crossed that future Givebacks remain proportional to about 10 percent of revenue,” TechCrunch said.
For its first year alone, Lemonade has donated a good of money to charities. Specifically, the $53,174 went towards 14 charities:
- American Civil Liberties Union
- American Red Cross
- charity: water
- Citymeals on Wheels
- Code to Inspire
- Evolve Creative Alliance
- Feeding America
- Make-a-Wish Foundation
- New Story
- The New York Society for the Prevention of Cruelty to Children
- Robin Hood Foundation
- Teach for America
- Women in Need
To read more about Lemonade’s Giveback, click here.