Executive Summary

“Words matter in insurance,” InsurTech watchers Matteo Carbone and Adrian Jones wrote in an article about InsurTech carrier financials they published on LinkedIn, offering information about insurance regulatory actions related to the InsurTechs. In particular, the two authors highlight definitions of agents. brokers and insurers—distinctions that some InsurTechs gloss over in their marketing efforts.

Here, Carrier Management excerpts that commentary with permission.

See related article, “He’s Gaining on Us?’ An ‘Inconceivable’ Quarter of InsurTech Carrier Financials,” for financial insights from the same LinkedIn article.

The complete LinkedIn article is available here and here.

What’s in a name?

A recent startup proclaims:

“[Company name] Insurance is a [line of business] insurance company that provides [line of business] coverage to small businesses through a simple online experience. Offering A.M. Best A-rated insurance… direct to customers since 2018…”

That wording makes consumers think they’re dealing “direct” with an insurer, not an agent or broker, which is what this company is.

Words matter in insurance, as illustrated in the first section of the California Insurance Code.

  • Insurer: “The person who undertakes to indemnify another by insurance.”
  • Broker: “A person who, for compensation and on behalf of another person, transacts [insurance]…with, but not on behalf of, an admitted insurer.”
  • Agent: “A person authorized, by and on behalf of an insurer, to transact [insurance]…on behalf of an admitted insurance company.” [emphasis added].


(Editor’s Note: An online search of the wording quickly reveals that the company is Pie Insurance and the line of business is workers compensation.)

Welcome to a Highly Regulated Industry

Still on the subject of regulation, let’s have some fun with deficiency letters. Part of the joy of getting a new insurance program licensed in a new state is the exchanges with regulators. The insured makes a filing of a few hundred pages, the state reviews it and states their objections, and around we go for potentially months.

If you’re an insurance nerd, you might find these letters interesting, particularly Lemonade’s, if only because of how the sausage-making of insurance contrasts with public statements about doing better for consumers.

A recent letter from Oregon to Lemonade had language like this: “Please explain why the insurer is choosing such broad exclusionary language; and if possible, provide an example of why this is necessary to have.”


A letter from Virginia last month listed nine pages of objections, even objecting to Lemonade’s definition of “hovercraft.” A sample of the objections:

“The Company will need to withdraw under the Special Limits, items (g), (h), (i), (j), and (k). The limitations the Company has outlined in these sections are more restrictive than the provisions in the minimum standards set forth in the [Virginia Administrative Code]. It is not permissible for the Company to place limitations or impose special limits that are more restrictive than the minimum standards set forth in the VAC. For items h and i, it is acceptable to impose a special limit or to exclude business property but it is not acceptable to impose a special limit or to exclude property used for business purposes. For example, if I take my laptop (business property) home to do some work, the business property can be limited or excluded. However, if I use my personal computer at home to do some Bureau of Insurance work, that is personal property being used for a business purpose and coverage cannot be limited or excluded.”

Score a point for the Virginia Bureau of Insurance for using human language.

All this, and we haven’t even gotten to Policy 2.0.

Maybe dealing with U.S. regulators is why Lemonade is now keen on international expansion?