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You are here: Home / InsurTech / InsurTech and the Lemonade Story

August 9, 2017

InsurTech and the Lemonade Story

https://www.youtube.com/watch?v=CYjErLvaYLE

To view only selected portions, go to YouTube at https://youtu.be/CYjErLvaYLE

 

The Lemonade Story

In May of 2015, two entrepreneurs named Daniel Schreiber, the former President of Powermat, and Shai Wininger, the CEO and Founder of Fiverr, wanted to create a new type of insurance company.  Based on cutting edge artificial intelligence and new theories of behavioral  economics, this “new type of insurance company” would completely disrupt the current insurance industry.

The problem was that neither of them knew anything about insurance. 

So, they needed an insurance expert with decades of experience but one that could think out of the box.  They found Ty Sagalow and Innovation Insurance Group.

Backed by the largest seed investment in Israel’s history from VC powerhouse Sequoia Capital (the money behind Apple, Instragram, Paypal, among many others) along with Aleph, Lemonade was born, hoping to prove that when it comes to insurance, when “Life gives you Lemons, You Create Lemonade”, turning insurance from a necessary evil back to a social good.

Taking a new enterprise not associated with any existing insurance carrier from a concept on a white board to an actual licensed and functioning insurance carrier was no easy task.  In fact, it had never been done.

As the newly chosen Chief Insurance Officer, Mr. Sagalow had to:

  1. Staff the company (underwriting, claims, finance, legal etc.)
  2. Find and execute the proper reinsurance
  3. Work the CTO (a co-founder) in making sure the technology used for underwriting, claims, back office administration etc worked from multiple perspectives
  4. Negotiate with insurance regulators all over the country and ultimately obtain licenses to operate throughout the country.

Each of these tasks had substantial challenges.  For example, how do you find, and then convince, seasoned insurance professionals to leave their cozy traditional insurance companies and work for a startup? How do you convince reinsurers and additional investors to trust and join in the “lemonade experiment”? How do you convince insurance regulators to give a brand new insurance carrier a license to operate?  

Yet it was all done.

In less than a year, Lemonade was staffed with seasoned insurance professionals, along with the the world’s top coders and technology professionals, obtained high quality reinsurance from the some of the best reinsurers in the world, obtained an A rating, and, most importantly, was provided a license to operate in its first state, New York, a state historically known to be among the toughest insurance regulators in the country. 

Then came Illinois and California, and close to a dozen more states.  Within 10 months after getting its license in New York, Lemonade was licensed in states representing almost half of the country.  Operating in New York, Illinois and California, Lemonade now adds 1,500 new policyholders ever week to its homeowner’s insurance business. And, according to google, has captured more than 1% of the NY renters market in 9 months.

So, in July 2017 with the job of going from “zero to one” firmly done,  Ty Sagalow went back into the life he loved before Lemonade, consulting.  Still on the board of Lemonade Insurance Company, Mr. Sagalow now helps other InsurTech and traditional insurance, as well as technology companies, seeking insurance partnerships achieve their growth goals.

More about Lemonade

Filed Under: InsurTech, Speaking Events

Innovation Insurance Group, llc

Offices at Short Hills
51 John F. kennedy Parkway,
First Floor West
Short Hills, NJ 07078
917-620-2174 (Ty's cell))
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contact@innovationinsurancegroup.com
tysagalow@innovationinsurancegroup.com

Expert Witness

Ty Sagalow head shotTy Sagalow's unique background in legal, underwriting, policy drafting and claims – and his designation as a “qualified insurance expert” by the United States District Court for the Southern District of California – offers attorneys an unparalleled resource in D&O, E&O and Cyber insurance coverage disputes. He was also named "Most Helpful Expert" in a recent $8.7M coverage decision.

Mr. Sagalow served as Chief Underwriting Officer and General Counsel for AIG Executive Liability (formerly National Union Fire Insurance Company of Pittsburgh, PA), the world’s largest carrier of Directors and Officers Liability and Professional Liability Insurance. As General Counsel, Mr. Sagalow personally wrote or led teams that wrote all the D&O policies and many of the professional liability policies that AIG produced between 1988 and 2000 – policies which continue to serve as the foundational wording for the D&O and professional liability policies in the market today. As AIG Executive Liability’s Chief Underwriting Officer, Mr. Sagalow was charged with all underwriting interpretations and decisions for AIG D&O/E&O policies. In 2009, Mr. Sagalow headed up the team that rewrote all D&O policies for Zurich North America.

Ty is a cum laude graduate of Georgetown University Law Center and holds a LLM from New York University School of Law.

Fintech Consulting

Ty Sagalow Mr. Sagalow is a founding member of Lemonade. Founded in 2015, Lemonade is the first licensed and regulated InsureTech insurance company in the United States. Lemonade offers homeowners and renters insurance powered by artificial intelligence and behavioral economics. Launched in September 2016 in New York, Lemonade Insurance Company is operating in both New York, New Jersey, California and Illinois (as of 9/1/17) with expected operations in multiple additional states in the coming weeks and months. In its first 9 months of operations, Lemonade captured 1% of the NY Renters market and now issues over 2,000 new policies every week.

On July 1, 2017, Ty retired from his position as Chief Insurance Officer of Lemonade but continues as a board member of the Lemonade Insurance Company, and regularly advises other companies in the Fintech/InsurTech space.

Ty is a 36 year senior insurance executive veteran. Most of Ty’s career was spent at AIG where over a 25 year period he held various positions including Chief Underwriting Officer and General Counsel of AIG Executive Liability (D&O, E&O), Chief Operating Officer of AIG eBusiness Risk Solutions (Cyber insurance) and President of AIG Product Development. Following AIG, Mr. Sagalow was Chief Innovation Officer of Zurich North American and Chief Innovation Officer of Tower Group. Immediately prior to Lemonade, Ty founded Innovation Insurance Group, LLC, a premier consulting firm to the insurance industry.

Mr. Sagalow is considered on the world’s experts in innovation in the insurance industry having been credited with creating various insurance products including Y2k Insurance, (Entity Cover) Directors and Officers Insurance, Cyber insurance, Reputation Insurance, Collectible Authenticity Insurance and Intellectual Property Collateral Insurance. He is also the host of the series Innovations in Insurance With Ty Sagalow and What’s New in Insurance, both produced by World Risk and Insurance News.

InsurTech and the Lemonade Story

https://www.youtube.com/watch?v=CYjErLvaYLE

Company Profile

Innovation Insurance Group is an insurance consulting firm and insurance brokerage founded by 30-year insurance executive, Ty R. Sagalow, former Chief Underwriting Officer, General Counsel and Chief Innovation Officer at AIG, and former Chief Innovation Officer at Zurich, NA and Tower Group. IIG focuses on three core practice groups: product development, expert witness services (primarily in the Management and Professional Liability areas), and bitcoin industry brokerage services.

Learn more about Ty R. Sagalow
Learn more about Innovation Insurance Group
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Featured Topics

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  • Cyber Risk Insurance
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Featured Video Series

  • "What’s New in Insurance with Ty Sagalow"
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