Signature of Independence Writer Benjamin Franklin helped to form Philadelphia grant for insurance of house from fire loss 1752. It is the United States' longest real estate insurer. It has withstood the test of time, has a rich history and even a museum you can visit.
I also note some insurance concepts when researching this insurance company. At first, underwriting was interesting. Initially, it did not allow houses built entirely of wood – I always think of the Three Pigs fable of straw, wood and brick when I read such criteria for underwriting. Second, the company spent a lot of time mapping out the properties it insured:
The early directors of the Philadelphia Contributionship adopted the English custom to inspect and evaluate a property to determine its value before accepting it for insurance. At the second meeting of the board, the board members appointed two of their own members, Joseph Fox and Samuel Rhoads, to this year's surveyor and provided that at least one of them examine every house proposed for insurance. The surveyor would make "a written report to the clerk." These reports or investigations would then be discussed by the entire Board at the next meeting, which would determine the scope and prices of the insurance. As compensation, the Board allowed the survey 2 shillings and sixpence for “Mapping and reporting of the buildings' condition in an insurance policy. 1
There is much to be gained for the insurer, the policyholder, and the community when advance insurance and risk measurement are required. Insurance, unlike other products sold for the benefit of the individual only, is a social product. Making safer and stronger structures is important for all of us. It has always been my opinion that we should encourage stronger buildings through more risk loss analysis and risk of losses. As shown above, this is not a new 2000s concept that I promote.
Lemonade, the insurance company, is new. Its first public offer last week was made to much fanfare. The prospectus, which describes its business as a "Lemonade Stand", shows how different its methodology for insurance business promises to be, compared to The Philadelphia Contributionhip :
Since the dawn of time, insurance has both advanced and revolutionized of the. Early people risked intuitively collecting claims on common provisions in bad times by dividing their profits into good ones. The agricultural revolution transformed the risk pool from an adaptable instinct to an aspect of trade, with "insurance" included in loan agreements during antiquity. A number of inventions in the 1300s triggered the commercial revolution, which saw the lending of lenders from insurance and the opening of the first insurance companies. These flourished until the scientific revolution, when the discovery of probability theory signaled that every insurance company that preceded it, and the emergence of the insurance dynasties that have ruled ever since were threatened.
A new revolution now threatens these hegemonies.  The World Economic Forum noticed the conversions we are experiencing today, the fourth industrial revolution, and for good reason. The pace and breadth of today's innovations have no historical precedent, and they spread at an exponential, rather than linear, pace. As transformative as the previous revolutions were for insurance, there is reason to believe that today's will be even more so. No part of the value chain is immune this time: distribution models, business models, statistical tools, management systems, cost structures, company structures, company culture, technology stacks, user experience, marketing channels, data sources, data usage, value propositions, human capital – all this and more are appreciated.
That's why we founded Lemonade.
We would not know how to rent sitting through these big changes; nor do we know about a technical solution to their innovator's dilemma. Our analyzes led us to the conclusion that a new type of insurance company, built from the foundation of an unconflicted business model and advanced technology, will enjoy structural benefits that will prove increasingly powerful over time.
Lemonade strives to be such a company.
We realize that this is a wavy commitment and the journey will be long and uneven. We are run by David vs. The Goliath dynamic and likes to do things from the ground up: brands, experiences, technologies, products, cultures, organizations. But Lemonade is not everyone's cup of tea, which is why we wanted to describe our strategy in the hope that investors who share our thinking will be drawn to Lemonade, while those who will not seek their fortune elsewhere.
Things never stay the same. Old King George III had to live with rebellious Americans who were tired of ignoring complaints. Perhaps the time-tested methods of old insurance companies will not withstand modern cost-effective technology supported by those with new ideas. Time will come.
There have been many newly formed independent countries with allegedly better designed democracies and governments since our declaration of independence in 1776. New ideas are easy to come up with. It is much more difficult to get them to work in practice for a long period of time.
Thought for the day
The Constitution only gives people the right to strive for happiness. You have to catch it yourself.