Lemonade Looks Fresh(er) - November 2024
Lemonade reported in-force premiums of $889 million, up 24% year over year and higher by nearly 50% since mid-2022. The company now has 2.31 million customers, up 17% from year-ago levels, and gross profit climbed 71%.
A gross loss ratio of 73% was down sharply from the same quarter in 2023, and over the past 12 months, Lemonade's overall loss ratio of 77% was down 11 percentage points from the previous 12-month period. This quarter was the fifth straight period where Lemonade saw improvement in its loss ratio, and the insurer's ability to dodge the bullet on huge loss events during the quarter, like Hurricane Helene, was a noteworthy success.
What to Watch
First, it needs to keep bringing in new profitable customers, partially by taking advantage of a partnership with one of its early investors to give it access to cash that will allow it to take on new business more quickly. Car insurance will be a key driver of future growth for the insurer.
Second, Lemonade wants to keep using technology to improve operating efficiency, reducing expenses and eventually moving toward sustained profitability.
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