Secret Lemonade drinkers: Is Lemonade the tonic for Aviva and other UK insurers?

At this time of year, many festive hangover sufferers might wish they had stuck to soft drinks at the office Christmas party or swanky award ceremony. This might be more especially true in the insurance world. 

Are the UK’s largest insurers secretly quaffing Lemonade? 

Allianz and AXA have overtly made their move, becoming direct investors in the nascent fruit-inspired insurance start-up Lemonade. Others are feeling the ripples of the impact in the innovation pond. You can read our white paper here about facing up to disruptors in the insurance world.

Lemonade report that 25% of claims are paid within 3 seconds, elaborating that those 3 seconds are a claim-handling world record. Along with the use of chatbots, AI and advanced data analytics, such boasts pose an indelible challenge to traditional insurers. But is this a challenge or a counter-revolutionary tonic? Is the threat of high-tech disruptors such as Lemonade providing UK insurers the much needed impetus to revolutionise their business operations? 

Andrew Morrish, Aviva’s Claims Director recently eulogised over the Lemonade claims model, stating that Aviva are rigorously developing automation and big data solutions to quicken claim processes. With the central aim to make the whole procedure more palatable to customers, who have become accustomed to the on-demand delivery of today’s electronic services. Morrish understandably sees this as the ‘new normal’ and recognises that customers will walk, if insurers fail to meet their expectations. 

It is not just in claims where the ripples of Lemonade’s impact have been felt. At some point over the next few weeks, interestingly timed to meet Lemonade’s arrival in European markets, Aviva are quietly launching what they claim to be “an industry-first subscription-style insurance product.” 

Called AvivaPlus, the name strangely echoing the recent announcement of Disney’s new streaming service, Disney+. Blair Turnbull, MD of Aviva UK Digital, promises that “AvivaPlus is a significant milestone in our ongoing digital strategy which, through our commitment and investment in innovation, is making things more convenient, easier and quicker for our customers. It’s a continuation of our journey and it represents a step change in how we’ll offer products to our customers in future.” 

AvivaPlus includes features Lemonade customers will find very familiar, including; the ability to pay monthly, change or cancel policies without penalty, a single quote journey and quick claims decisions.  

Turnbull vouches for AvivaPlus’s customer friendly profile and adventurous application of gamification, “This is just the beginning. AvivaPlus is leading the way to help rebuild consumer trust and confidence. Over time we plan to add other types of insurance to AvivaPlus, as well as more features and reward benefits.” 

What is poignant about AvivaPlus is that it resides alongside Aviva’s current product range. It neither competes against, nor overlaps with their own existing products. Lemonade themselves report that four out of five new customers are not converts from another insurer but are new to insurance.  Read our other blog post about Lemonade’s move to Europe here.

In that sense, AvivaPlus is an attempt to take a hold of the unserved, disruptive market spaces that Lemonade themselves seek to exploit. Whether Aviva would have ultimately occupied that space in any event, without the overt threat from Lemonade is academic. After all, there is no implied limit on innovation but similar developments gestating in other UK insurers and the rise of Brolly, would strongly suggest that Lemonade’s ripples are being felt far and wide.