"Only an insurance product built with AI can truly insure AI"
Adina Eckstein, COO of Lemonade, said at Calcalist and Google’s AI Week that 98% of the company’s policies are sold using artificial intelligence and more than 60% of claims are handled by it. On the collaboration with Tesla: “Usually, insurance is about a person. Here, I insure software.”
"The layoff crisis is affecting us less. We have been built around AI since our founding a decade ago," said Adina Eckstein, COO of Lemonade, during a conversation held as part of Calcalist and Google’s AI Week. According to her, "These technologies are accelerating us, not slowing us down. SaaS companies, companies that sell software subscriptions, are being affected. Lemonade is not a software company; it is a technology company that uses technology to build insurance products."
"The insurance industry is worth trillions of dollars, and it doesn't appear to be going away anytime soon," Eckstein added. "I don't think a group of developers can simply come along and build an insurance company, because the industry requires billions of dollars in capital, regulatory compliance, guarantees, and more. Beyond that, we are a growing company. We are growing by more than 30%, we expect to grow even faster next year, and we have the opportunity to continue growing alongside our existing employees while helping them become even more productive."
We hear about AI all the time, usually in the context of customer support. How are you different from everyone else?
"We also use AI in customer support. Operational efficiency drives our business. The more we can reduce variable costs, the more competitive our pricing becomes, which allows us to offer customers better prices and continue growing. Operational efficiency is a growth engine for our company."
According to her, Lemonade’s use of AI extends across nearly every aspect of its operations. "Ninety-eight percent of our policies are sold through AI, and more than 60% of claims are handled by AI. Most of our new code is written with AI assistance. We use AI in HR, finance, and many other functions. I don't think there is much that humans can do today that AI cannot assist with in some way."
You oversee human resources. How are roles changing in the wake of the AI revolution? Aren't people afraid?
"Of course there is fear. People are worried about their future, and my job is not to dismiss that fear. I can't tell people not to worry or promise that they'll still have the same job a decade from now. That would be a dishonest answer. What I can tell them is that they need to explore new technologies, embrace them, and be among the first to adopt them.
"Roles are changing from top to bottom because AI is now performing many tasks that were previously done by humans. People are moving toward architecture, strategy, oversight, coaching, and training. Those who successfully make that transition, and we as a company are proud of our ability to adapt, are the people who will thrive. There is no point in fearing the change; the key is to jump in and learn."
What will the future of insurance look like?
"There is no industry better suited to AI than insurance. Think about what insurance is: a statistical model used to assess risk and determine pricing. The more information you have, the more accurately you can do that. Traditionally, when you buy car insurance, insurers look at factors such as age and gender. We use telematics to move beyond that model."
According to Eckstein, the technology enables pricing that is based far more on actual behavior. "Young drivers, for example, typically pay very high premiums because they are considered higher risk. We use AI and telematics to evaluate how they actually drive. With AI, we can provide better, faster, and more accurate service. In doing so, we can help restore trust in an industry that many people currently dislike."
How will autonomous vehicles affect the insurance industry? Will AI reshape autonomous vehicle insurance?
"The future is already here. We launched a collaboration with Tesla that includes an insurance product for Tesla FSD drivers at a significant discount. What's interesting is that insurance has traditionally been centered around people. In this case, I'm effectively insuring software."
"Only an insurance product built with AI can truly insure AI, it's machine talking to machine. When Tesla releases a new version of its Full Self-Driving software, we can update our models and adjust coverage accordingly. The implications are far-reaching. We already have customers who submit claims through AI agents they operate themselves. This is going to transform the insurance industry."
