Lemonade has promise but won’t necessarily face smooth sailing with an expansion into Germany, predicts the head of Getsafe, one of its European rivals.
“Lemonade will have to struggle in Germany,” Getsafe co-founder and CEO Christian Wiens told Carrier Management via email. “The market is regulated and complex, and the domestic InsurTechs are in no way inferior compared with Lemonade.”
At the same time, Wiens noted that “Lemonade is a promising new player in the insurance world” and that “with strong investors at their side they can buy their way into different markets.”
Lemonade declined to comment.
Wien’s remarks follow Lemonade’s June 2019 announcement it had entered the German market. At the time, Lemonade co-founder Shai Wininger explained in prepared remarks that the company chose Germany for its first international launch “because it combines a very traditional insurance industry, with a very forward thinking, digital-first consumer.”
Lemonade, a New York-based startup, is a full stack insurer and Germany’s Getsafe is an MGA, but both are InsurTechs that operate in areas including home and rental insurance. Lemonade in Germany will be a rival to Getsafe in areas including contents and liability coverage. Wiens said his company is confident about the competition to come, but also following the situation closely.
“We are quite relaxed, but of course we have a keen eye on them,” Wiens said.
While he noted Lemonade’s promise, Wiens predicted they will face challenges in establishing a substantive presence in the German market.
“While Lemonade is a fantastic story teller, they concentrated on their brand and not so much on their product and technology,” Wiens said. “Germans, on the other hand, prefer to do it the other way around.”
Competition or not, Wiens said that Lemonade’s entrance into the digital insurance market in Germany is positive because “it’s an additional impulse” and “it further advances the digitization of the industry.” He added that demands of younger consumers across Europe will provide plenty of opportunity for digital insurers and related businesses.
“The market in Europe is large and more and more young customers are looking for digital solutions that better fit their lifestyle,” he said.
Lemonade, which launched in 2016, has raised about $480 million so far, including a $300 million financing round in April designed to help it expand in the United States and in Europe, and go beyond its initial focus on home and rental insurance.
Getsafe, based in Heidelberg, in western Germany, began in 2014 and launched its first digital insurance offering at the end of 2017. The company disclosed in June that it has raised $17 million in first-round financing, money designed to help propel an expansion into Great Britain and the rest of Europe. Millennials with smartphones are its primary target audience.