This article from Wall Street Journal is written by Leslie Scism
Insurance-technology upstart Lemonade Inc. LMND 7.83% is rolling out an auto-insurance business, moving beyond renters, home, pet and life-insurance policies into one of the most competitive parts of the industry.
The New York-based firm will rely heavily on telematics to size up risk in applicants, company co-founder and co-Chief Executive Daniel Schreiber said in an interview. At least initially, it also will use some traditional rating factors, such as age, gender and credit scores, the firm said. The product is now available in Illinois and sales will begin in other states soon, it said.
With telematics, insurers monitor policyholders’ driving behaviors either through smartphone applications or devices embedded in their vehicles. The devices track hard braking and speeding, as well as hours of travel, location and total miles driven. Some programs also measure distracted driving. Insurers analyze the tracking data to tailor individual rates.