What happened

The stock market was having a generally negative day on Monday, with all three major indexes in the red a couple of hours into the trading day.

But insurance tech company Lemonade (NYSE:LMND) was another story altogether. As of 11:20 a.m. EST today, the high-momentum recent IPO had gained nearly 14% and hit a new all-time high.

Man holding cut lemons over his eyes and smiling.

Image source: Getty Images.

So what

Remarkably, the sharp upward move came without any significant news and seems to be a continuation of the impressive rally that has seen the stock rise by more than 260% since the beginning of November.

For one thing, the company's recent results have been extremely impressive. Lemonade announced recently that it had reached 1 million customers after just 4 1/2 years in business. For comparison, it took State Farm, GEICO, and USAA 22 years, 28 years, and 47 years, respectively, to reach the same milestone.

Furthermore, Lemonade's lock-up period expired about a week ago, and we didn't see any of the massive selling pressure investors had feared.

Now what

Lemonade investors are most excited about the company's potential to branch out into other forms of insurance besides the homeowners, renters, and pet insurance it currently offers. This is a big part of the investment thesis.

The company announced two months ago today that it would be rolling out term life insurance within 90 days. Life insurance is not only an $800 billion market, but it's also arguably the most-easily disrupted type of insurance. The process for obtaining life insurance is clunky and time-consuming, so if Lemonade can replicate its user-friendly technology in the life insurance space, it could be a game changer. With the launch getting closer, it looks like investors are very excited about the potential for the stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.