This week, Rachel sat down with Nina Rauch from Lemonade, an insurance company with a business model that’s structured around social impact.
Traditional insurance companies work by charging premiums, using that money to pay claims and expenses, and then keeping whatever’s left over as profit. Lemonade isn’t a traditional insurance company.
When customers pay their premiums, Lemonade takes a flat fee and then sets the rest aside to pay claims and expenses. At the end of the year, the leftover money doesn’t go back to Lemonade — it gets donated to nonprofits.
“We’ve built a system that reduces conflict of interest. We’ve changed it from a bilateral relationship into a trilateral one — where we have a third partner, which is our nonprofits. And it’s really rebuilding trust in the industry.”
Nina has been Lemonade’s social impact coordinator since 2019, but she first got involved with fundraising when she was about 16 years old, a few years after her mother died of breast cancer.
Nina started fundraising and spreading awareness of breast cancer at her all-girls school, and she continued to do so while she was attending the University of Cambridge. There, she founded Pink Week — a series of events designed to raise awareness of the disease and funds for charities dedicated to breast cancer care and research. The program grew beyond Nina’s imagination, eventually spreading to other universities.
“It really got me motivated to focus more on micro-donations — and how accessing our generation is a new way of looking at fundraising. Which is why it’s perfect that I’ve ended up at Lemonade, which is a company that understands how they can bridge the gap between for-profit and nonprofit for millennials.”
Nina oversees the company’s social impact campaigns and partnerships, and she also selects the nonprofits that the company gives back to.
Lemonade partners with nonprofits that reflect both the causes that customers care about and the stands that the company has taken. For example, after becoming the first insurance company in the U.S. to pledge not to invest in fossil fuels, Lemonade partnered with the environmental justice organization 350.org. Lemonade also partnered with March for Our Lives after it stopped insuring assault weapons and any firearms that weren’t being used or stored responsibly.
Nina says that she hopes other companies will follow in Lemonade’s footsteps by building social impact into their products and working to bridge the gap between nonprofits and for-profits.
“Insurance isn’t an obvious choice, right? So it shows that it shows that any industry really can do it. It’s not necessarily about the industry you belong to, rather the way that you think about social impact. So if we just change the way that we think about social impact, it can kind of be applicable to every industry.”