Insurance firms built on ‘an AI substrate’ will thrive – Lemonade’s Daniel Schreiber

Companies in the insurance industry that are built on top of “an AI substrate” will “enjoy a structural and competitive advantage” when looking to succeed.

That was according to Daniel Schreiber, chief executive at Insurtech firm Lemonade, who spoke during a keynote address at the Insurtech Insights Europe conference yesterday (19 March 2025).

Schreiber added that the combination of a structural and competitive advantage “rarely come together with the ferocity that they do” in the insurance sector.

In his keynote address, entitled Forget everything you know about insurance, Schreiber laid out how Lemonade has repeatedly replaced human agents in claims and customer support functions with artificial intelligence (AI) agents – leading to positive impacts on customer satisfaction.

He explained: “AI is better than humans at the two things that matter in insurance, precision and automation. By precision, I mean the ability to quantify risk.

“Lemonade has been deploying more and more automation and I can tell you as an empirical fact that our customer satisfaction scores go up every time we move something from humans to AI, while collapsing costs and increasing response times.”

Legacy challenge

While making AI the foundation of Lemonade has led to improved results, Schreiber admitted that it was “a young company” and thus did not have to contend with the challenge of legacy technology.

He explained: “It’s very, very difficult for large corporations, willing as they are, to reinvent the very chassis upon which they are built while the car is moving.

“There are almost no examples, in any industry, of any incumbent managing to pull off bringing 600 different systems into one whole – it doesn’t really happen.”

However, he added that, for newer entrants to the market, the intersection of insurance and what AI can do in the sector is a unique opportunity.

“Almost every industry other than insurance is selling bytes or atoms – insurance is selling probability and monetising statistics,” he said.

“Once you strip away everything else you’re left with that – and boy oh boy can AI and machine learning transform algorithms that translate into loss ratio and the ability to price risk.”