Insurance technology company Lemonade (LMND 1.20%) is down by more than 75% from its all-time high reached in early 2021. And while the stock performance has certainly been a disappointment to investors, it's also important to take a step back and consider how the business is doing. In this Fool Live video clip, recorded on Nov. 22, contributor Matt Frankel and Industry Focus host Jason Moser do exactly that. 

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Jason Moser: Matt, I want to go ahead and start with Lemonade, want to go ahead and let you kick this off for us. Either Lemonade it's been a little bit of a bumpy ride. It's had a volatile ride. At one point it was up really big for you. I think better than something like 200% early on but it's come back down to earth. As the market close on Friday, shares are down about 10% from the date of the show by my calculations. Again, not thinking as much into the stock performance as we are into the business itself but how's the business of Lemonade doing?

Matt Frankel: Yeah, the bumpy ride is a generous way to describe the stock's performance I guess I would say. If you're curious the S&P is up 35% since that show so underperform the S&P by 45 percentage points. But like you said, the stock price, especially on shorter time intervals is not really what we're going for. Having said that, I wish it would have stayed at about $185 level or wherever it topped out at back in January I believe it was.

Moser: But there was a lot of enthusiasm at the time. Remind our listeners again what does Lemonade do and why do you think that enthusiasm exists.

Frankel: Lemonade is an insurance tech company. The business premise makes a lot of sense. The insurance buying process is historically terrible for lack of a better term. Their claims processes is bulky. I don't know if you've ever filed an insurance claim on your auto insurance or your homeowners' insurance.

Moser: Oh, I have.

Frankel: It is not a fun process.

Moser: No, it's not.

Frankel: Lemonade's philosophy is there has to be a better way. They make you see you can get insurance quote instantly. You could buy a policy pretty much instantly online. At a competitive price, you can submit a claim, they'd process some claims in seconds. It's a really quick process. They've done a great job of disrupting a few insurance markets particularly renter's insurance that's been their bread and butter today. They also rolled out homeowners insurance, which the idea being that renters will eventually buy houses, you don't want to lose that customer, you want to give away to trade up.

Moser: Yeah.

Frankel: Between renters and homeowners, that makes up 83% of Lemonade's business right now.

Moser: Oh wow.

Frankel: They're primarily renters and homeowners for the time being. Pet insurance is another 15%. Life insurance makes up the other 2% right now and that's what Lemonade does. With renter's insurance, they've been very successful. It's a type of insurance that's cheap, number one, and it's the type of insurance that most millennials wouldn't buy if there wasn't a good option. They've done a great job of building their customer base up. They hit a million customers in just over four years. It took companies like State Farm and all these other legacy players more than 20 years to get to 1 million customer milestone. They currently have 1.36 million customers. That's up 45% in the past year alone.

Moser: Wow.

Frankel: Really, very successful in terms of building up that part of their business. The question is, number one, can you make money at it? Because right now their loss ratios are a little higher than they need to be to become profitable. Just their loss ratio meeting the percentage of the premiums they take and that they're using to pay claims was 77% in the most recent quarter. They needed under 75% at an absolute maximum to be profitable. Can this insurance model translate to more expensive and complex types of insurance? Renter's insurance is not only cheap, it's relatively easy to underwrite. When you talk about things like auto insurance, which is their newest vertical, which we can talk about in a second, the average auto insurance premium is 10 times the average renters insurance premium, but it's a more complex type of insurance.

Moser: Yeah.

Frankel: That's really the question. Lemonade just hit a fresh 52-week low today, which isn't ideal for anybody who invested in it like me. But that just gives it a bigger growth potential, I guess going forward.