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Lemonade launches new personal auto product, stock soars 12%

Lemonade logo driving car.jpg

Lemonade on Wednesday finally launched its personal car insurance product, Lemonade Car, six months after it announced its intentions to expand into the automotive sector.

News of the auto coverage was well received on Wall Street, as Lemonade stock shot up as much as 16% in early trading. By midday, shares remained up 8.7% at $74.29. Fellow InsurTech Root’s shares also gained on the news, adding 5%. Hippo's shares were additionally in the green.

Lemonade launched its auto coverage in Illinois. It is offering customers an opportunity to bundle home, pet and life policies with car insurance.

One selling point the InsurTech is touting for Lemonade Car is its system that enables clients to file claims within minutes using Blendr, the firm’s proprietary insurance operating system.

“We stood up entire teams to handle tows, repairs, body shop services, as well as support for the 24/7 roadside assistance and emergency services we now offer,” said Shai Wininger, Lemonade’s co-CEO and co-founder, in a statement.

“Providing a best-in-class car claims experience means being there for your customers 100% of the time, with surprisingly fast service and lots of empathy,” he added.

The company plans to roll out the product across the US and committed to offer lower rates and coverage for electric vehicles and hybrid cars as part of its goal to reduce carbon emissions.

“We wanted to introduce a product that will not only reinvent how people buy car insurance, manage their policy and file claims, but also do something good for the planet,” Wininger said.

The CEO continued: “Since we can’t stop using cars just yet, we will help compensate for the CO2 emitted from our customers’ cars by financing reforestation on an ongoing basis.”

“Using the telematics technology in our app, we’re able to estimate how much carbon dioxide is emitted by each ride, and plant trees accordingly,” he said.

Lemonade originally announced its intentions to expand into the automotive sector in April, seeking to diversify its book of business and capitalize on its lofty valuation.

However, slow progress on the new product weighed on Lemonade’s stock performance in recent months.

The company is slated to announce Q3 results on November 8. In August, co-CEO Daniel Schreiber said Lemonade expects to remain cashflow negative for the next couple of years as it invests in new product development and pushes growth.

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