Probably a fair amount of fat to trim.
That depends on how large the industry is, what its cost structures look like and how price sensitive it is.
A small, persistent cost advantage can be enormous in the insurance industry.
You're also saying that in a thread about a company that just produced VC-sized returns and is IPO'ing. Your premise clearly doesn't follow, as most VCs invest early and will exit with an IPO like this. The primary question going forward with Lemonade is for public shareholders and whether the company can get a lot bigger in the future. The VC-sized returns were already generated for the early VCs.
They still market heavily, and I presume they paid well for their (pretty good) branding.
When I applied there was a wait between applying and having coverage: an amount of time I suspect correlated to a human having to review materials.
My local market has weird insurance regulation, so I had to reach out for customer-service to ensure coverage which wasn't explicitly in the policy. The regulation and compliance department of any insurance company is likely rather large and expensive and rather difficult or risky to offload to AI.
I haven't had to make a claim, but I get the strong opinion that automated claim approvals are basically a function of claim amount and claim history. Anything over $X or for your Nth claim still involves a human at least as a gatekeeper. The AI may be real, but it seems strongly like the usual "fake it till you make it" AI that lots of companies claim to have but are actually 'mechanical turks'.
An agent generally needs a couple hundred paying policies to be in the black.
Can’t really offer a source but I heard it from an insurance broker personally.