Talk about timing. Last week, Lemonat announced that he had joined auto insurance. This week, it announced the acquisition of Metromile, one of the world’s largest car insurance companies. Insurance Technology (M&A) has been around strong, But in reality, I did not expect to see such a transaction any time soon. But I don’t think I should be surprised. After all, lemon is the most sought after digital insurance. In six years from the beginning to a International, A publicly traded brand with a market value of nearly $ 4 billion. As the expansion of production increased in the industry, it was meticulous. Whether you are surprised by the announcement or not, this is great news for all of us.

  • General insurance is a good strategy. I believe the future of insurance will be the solution. Of course, companies that sell limited products and services thrive. But companies that sell general packages control markets and increase their operational capacity. Consumers want insurance that is easy and “one-time trade”. According to our survey data, the three main reasons customers buy more products from their auto insurers are low cost, multi-policy management and trust in the supplier. Insurance providers that offer comprehensive solutions can use deep customer relationships to reduce purchasing disputes and widen the margins (partly with low average customer acquisition costs). Lemon recognizes this opportunity when he supports his growth approach and his interest in Metromil.
  • The growth of the insurance market is multifaceted. From the very beginning, organic growth was the logical focus of lemons. The company offered tenant insurance and soon became pet insurance. Earlier this year, Lemon began selling life insurance through the BESTOW API, using an incentive insurance scheme to encourage growth. It is now buying Metromile to increase its size in the business to meet the needs of its customers. Lemon’s focus on Millennium customers is smart, and its strategy to deliver comprehensive and affordable solutions under one umbrella will benefit the customer experience.
  • Vertical integration and virtual integration are coming together. Both Metromile and Lemonade have vertically integrated operating models. They both write their own covers, develop their own products, use their own software, and rely on third-party information to manage their businesses. Newcomers like insurance use technologies born in the digital economy, and their modern platforms should limit the risks of integration after purchase. But it is. Imaginary A merger that will help insurers, especially small ones, expand their products and services into new markets, as Bestou has done with Lominad’s partnership. Both techniques – vertical and virtual integration – have a place in the digital insurance strategy (as Lominad’s development history shows). For competitors, especially those at risk of displacement when the insurance coverage is accelerated, the emphasis should be on speed.

Digital Transformation is here to stay. Insurance is a large, complex industry. Many markets are unused. There is room for success for many, but success begins with putting the customer in the middle of your business strategy.

This post was written by senior analyst Jeffrey Williams and appeared first over here.