This article was originally published by HousingWire, an HW Media publication dedicated to serving mortgage and real estate professionals.
The competition in the home insurance space continues to heat up.
On the same day that insurtech startup Hippo announced a $150 million Series E raise, Detroit-based Nexsys Technologies revealed a new partnership with competitor Lemonade that’s aimed at boosting the digital insurer’s offerings.
Newly public Lemonade has partnered with Nexsys, a fintech company that aims to provide “a suite of essential tech solutions” for mortgage origination and closing. (Nexsys was also named a 2020 HW Tech100 Mortgage Winner).
The goal of the partnership is to simplify the homeowners’ insurance verification process. Via the company’s Clear HOI product, Nexsys users will be able to leverage a tool that “digitizes the previously manual communication between mortgage lenders and homeowners insurance companies,” according to the company.
Clear HOI creates a digital connection between insurers and mortgage lenders – which Nexsys says removes unnecessary delays and eliminates potential errors.
“Now that Lemonade has joined the Clear HOI platform, mortgage lenders will be able to use the innovative tool with even more clients,” the company said.
“Home financing has been totally redesigned, transforming it from a pen-and-paper system to a completely digital experience for more and more lenders,” said Mike Lyon, executive vice president of Nexsys Technologies, in a written statement.
Nexsys says it has also developed a new set of application programming interfaces (APIs) that will allow mortgage lenders to securely pull in evidence of insurance directly into their loan origination systems – ensuring that a client’s privacy is protected. The company will work with Lemonade’s AI-powered insurance platform to integrate Lemonade and a mortgage lender’s LOS via these new APIs.
“This integration will allow Lemonade to quickly confirm a client has provided consent to share their insurance information, which in turn will maximize efficiency,” Nexsys said.
Lemonade is licensed as a property and casualty insurance carrier that began offering homeowners and renters’ insurance in New York in late 2016. That offering is now available for most of the U.S. population. The company says it powers its offerings with artificial intelligence and “behavioral economics.”
Lemonade claims it has built a system that “collects 100x more data than traditional carriers,” giving it the ability to generate predictive data that it says can help improve underwriting and pricing.
It operates contrary to traditional insurance models, charging a fixed percentage as a flat fee.
The company went public earlier this month, with shares soaring more than 138% in its market debut. In June, Lemonade’s S-1 revealed both increased revenue and net loss in 2019. In fact, the company has not been profitable since its 2015 inception, according to its S-1.