An executive speaking at Lemonade’s Investor Day late last month took investors behind the scenes to watch some of its AI bots in action.

The point of the demonstration, however, was to do more than showcase the company’s “cool AI tech.”

“It’s not just cool AI tech,” said Chief Operating Officer Adina Eckstein. “It has driven real business impact.”

Throughout the event, Eckstein and other executives highlighted the business impact of a culture built on AI with graphics depicting accelerating growth of in-force premiums against flat expenses. In particular, Eckstein’s presentation focused on flat talent expenses—and a culture in which Lemonade “makers” (employees) reinvent their roles with no fear of AI taking over tasks they handle at any point in time.

Eckstein began her presentation, titled “Infinite Scaling With AI,” with a two-line graph displaying one sharply upward sloping line, representing the compound annual growth of in-force premiums over the last three years, positioned to form an acute angle with a flat line representation of headcount growth.

“Our IFP has grown 25 percent year over year in the last three years. This represents more than doubling our business. In the same time frame, our headcount has only grown 2 percent. That’s basically flat,” she said.

The slide revealed the headcount numbers of 1,119 in 2021 and 1,216 for 2024.

The graphic resembled others presented throughout the day by various executives, including a theme-setting initial one accompanying introductory remarks from Chief Executive Officer Daniel Schreiber. Schreiber introduced the “geometric shape [that is] technically called an ‘angle raise,'” noting that its recurrence throughout the event was purposeful. For Schreiber, the flat line of the angle represented operating expenses net of growth spend. “There’s some magic happening here,” allowing Lemonade “to grow [premiums] dramatically while keeping expenses absolutely flat,” he said.

The magic, Eckstein revealed later, is the culture built around AI and the fearless use of AI by a stable group of employees. She summed up the idea with another representation of the “angle raise.” On this one, the growth section of the recurring graphic was labeled with the words “artificial intelligence” written on a triangle section filled in with Lemonade’s signature hot pink color sitting on top of a slim gray rectangle labeled “human intelligence.”

“At Lemonade, our culture isn’t one where we hire people to do specific jobs with rigid job descriptions. We hire an attitude. We hire resilience. A growth mindset. Curiosity,” Eckstein said.

“Today you’re a customer support specialist, but tomorrow you could be an AI trainer. Your roles and responsibilities need to constantly evolve as we onboard new technologies onto our platform,” she said.

During her presentation, Eckstein gave a real-time demo showing investors how Lemonade makers might supervise and train one of Lemonade’s three key AI bots—Maya, the customer service bot. Eckstein’s supervision involved giving Maya a quick instruction to help her respond to a customer request more humanly. (Specifically, she scolded the bot for not congratulating a customer wanting to insure an engagement ring on her upcoming wedding.) The training involved actually writing out an instruction for future customer interactions (to inform the customer that he or she might need to upload a receipt for a new item the customer wants to add to a policy).

“Employees at Lemonade aren’t threatened by the [AI] wave. They’re exhilarated by it,” Eckstein said, noting the ease with which they move into these supervising and training roles.

“At Lemonade, our culture is technology and it’s ingrained in our DNA,” she said, at one point referring to the exponential growth of technology, which makes it difficult for companies to maintain their competitive edge. “As advancements accelerate, the time between innovation collapses, meaning even the most cutting-edge companies need to constantly evolve or they’ll risk falling behind. It’s like a ginormous wave that keeps coming at you, and you’re either going to surf it or you’re going to drown.”

“Culture matters. Culture can be a competitive advantage. Bad culture can be a strategic disadvantage,” she said.

In addition to demonstrating Maya, along with the supervising and training components of an all-encompassing technology platform known as Blender, Eckstein showed claims bot AI Jim in action on a pet insurance claim and also discussed a third bot, Cooper, which automates the engineering team and other internal tasks.

Related article: Lemonade Exec: AI Getting the Right Claims to the Right Adjuster

“At Lemonade, we don’t use AI only to support customer-facing business functions. We use it literally everywhere. Employees use AI to replace every single mundane, repetitive, error-prone business process, amplifying their performance [and] at the same time cultivating a deep understanding of these technologies and ingraining it within their DNA,” she said. She offered the example of the head of procurement, who operates with a team of just two humans and “countless bots.”

Referring to Cooper, she noted that he automated 95 percent of Lemonade’s IT tool requests, 100 percent of purchase procurement and purchase renewal requests, and reduced invoice approval time in finance to a single day. Slides accompanying her presentation showed messages that Cooper sent to makers asking if he could remove licenses for unused IT tools and reminding them of tech purchase agreements and outstanding invoices to be reviewed.

Cooper even facilitates the performance management process of makers, reminding managers when their employees are up for review and asking them to select other makers to provide input on how those employees are doing. Cooper then collects the 360-degree feedback, synthesizing it into a summary that the manager can review before delivering his or her own assessment. Cooper also “issues a monthly pulse report to every manager at Lemonade and asks them, ‘How are your employees doing?’ and includes that information as well into this review summary,” Eckstein said, displaying a slide with month-by-month average scores on employee values and impact.

“Part of maintaining expenditure discipline is making sure that every person is performing at their best,” she said.

Eckstein then paused to acknowledge that the information on Lemonade’s use of AI in every aspect of the company, including performance management, might be overwhelming to some listeners.

“I get it. We’ve been at this since 2015. It feels like a lot of AI—because it is. I have hundreds of examples like this. I’ve just showed you the tip of the iceberg of what our technology can do. We’re just scratching the surface,” she said.

“When you’re constantly surrounded by innovation and technology and inspired by how it can boost your performance, you can’t help but become an innovator yourself.”

“From Day 1, we sought out to build a different type of company—one that has less people and more code,” she said, referring to competitors that have hundreds of different systems bolted onto one another as a result of acquisitions and mergers. “If they want to make use of any new technology, they have to seek help from third parties, and then become dependent on them and their road maps to have lengthy dependent-heavy implementations.”

At several times during the Investor Day event, Eckstein, Schreiber and other executives referred to a comment from Berkshire Hathaway Vice Chair Ajit Jain, who said that Berkshire’s personal lines insurer GEICO has “more than 600 legacy systems that don’t really talk to each other.” (Related article, “Berkshire’s Jain on GEICO Profit: ‘Don’t Take It to the Bank’; Tech Needs Rebuild“)

“We have just the one, and it’s really easy to integrate new technologies onto it,” Eckstein said. “Our singular Blender platform knows everything there is to know about a customer. It knows what campaign led a customer to us. It has a single system of record of every single interaction the customer has had with us. It’s able to flag risk factors or opportunities for upsell into our models for future learnings and predictions,” she said.

Zooming out from the inner workings of Lemonade technology to summarize the business impact, Eckstein and Schreiber asserted that efficiency drives savings, which in turn can fuel competitive prices that attract customers. Completing a flywheel, customer information feeds Lemonade technology, which makes the company even more efficient, Eckstein suggested.

“To sum it up, we’ve built an organization that has a ‘bring it on’ culture and a technology stack that delivers unparalleled efficiencies at scale,” she said, concluding her 30-minute part of a two-plus-hour Investor Day event titled “Our next 10X: From $1 billion to $10 billion.”

During earlier segments of the event, Schreiber and Chief Business Officer Maya Prosor set out a road map for growing a soon-to-be $1 billion book of in-force premiums to $10 billion by 2035, revealing that Lemonade is poised to shift into high-gear on its auto insurance business. It is aiming to grow car insurance through cross-sales from existing renters and pet insurance customers under age 35 and the next generation of insurance buyers, they said.

“While renters and pets were able to propel us to 1 billion, car has to start revving up in order to propel us from 1 to 10,” Schreiber said.

Featured image: AI-generated image/Adobe Firefly