Insurance
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Online insurance provider Lemonade files to go public
(10 Jun 2020) Move over fintech, now there is insurtech, which promises to "disrupt the insurance industry through innovation and online efficiencies." Only time will tell just how disruptive a force it will become, but we will soon have a new metric to measure its success. Lemonade, the insurtech firm backed by SoftBank, has filed to go public. Reviewing the startup's 08 June filing with the SEC, it plans to raise $100 million in an IPO and trade on the New York Stock Exchange under the symbol LMND, with Goldman Sachs and Morgan Stanley underwriting the deal. According at the company's website, Lemonade offers home and renters insurance "built for the 21st century." The company uses artificial intelligence and machine learning to increase efficiencies, thereby creating savings (at least in theory) for its customers. While the company, which has been around since 2016, is not profitable (it lost $36.5 million on $26.2 million in revenues last quarter), that doesn't mean shares won't take off when they begin trading within the next few months. Investors are hungry for IPOs, as there was a dearth of new offerings during the heart of the pandemic. Should you invest? While we could see the stock spiking out of the gate, our advice would be to remain patient—odds are good it will be trading below its IPO price within months after the launch. As for Masayoshi Son's SoftBank, the VC firm desperately needs a win following the massive losses it took in WeWork, Sprint, and Uber—putting a serious dent in Son's 300-year master plan. |
Inflation may be muted, but not when it comes to your auto insurance rates
(15 Feb 2018) Did you notice a hike in your auto insurance premiums lately, despite having no new claims? It's not you, it's your insurance company. Technically, it is your insurance company trying to cushion the blow of higher expenses. In a typical year, auto insurance rates tend to go up at the rate of inflation. This past year, however, they were up an average of 7%. There are several factors for the big rate hike, predominate among them is distracted driving, i.e. jugheads trying to text on their smartphone while they should be paying attention to the road. While there were slightly fewer deaths in America last year from traffic accidents (thanks to improved safety technology), the number of incidents rose. With more advanced systems in the vehicles, the insurance companies are shelling out more money for repairs. Sadly, we are all paying the price as the insurance companies struggle to remain profitable in an era of juvenile behavior behind the wheel.
(15 Feb 2018) Did you notice a hike in your auto insurance premiums lately, despite having no new claims? It's not you, it's your insurance company. Technically, it is your insurance company trying to cushion the blow of higher expenses. In a typical year, auto insurance rates tend to go up at the rate of inflation. This past year, however, they were up an average of 7%. There are several factors for the big rate hike, predominate among them is distracted driving, i.e. jugheads trying to text on their smartphone while they should be paying attention to the road. While there were slightly fewer deaths in America last year from traffic accidents (thanks to improved safety technology), the number of incidents rose. With more advanced systems in the vehicles, the insurance companies are shelling out more money for repairs. Sadly, we are all paying the price as the insurance companies struggle to remain profitable in an era of juvenile behavior behind the wheel.