Lemonade (LMND -27.72%) is reporting Q4 earnings on February 23. So as always, I will recap what happened in this quarter. We're going to have a look at their Q3 numbers and some of the company's activities. You can find the video below, but here are some highlights. 

  • Lemonade stock is now priced under its initial IPO price. 
  • In force premium (IFP) growth accelerated to 84% year over year (YOY) with IFP of $347 million and about 1.4 million customers, up 45% YOY.
  • Premium per customer increased 26% YOY to $254. Gross earned premium increased 86% YOY to $80 million.  
  • The most important metric to me, gross loss ratio, was 77%, which is 5% higher than a year ago, but in that time Lemonade has launched pet and life insurance as well as growing the homeowners segment, so that was bound to happen. In the future, the company expects loss ratios across all Lemonade product lines to be below 75%.  
  • I personally would like to see the annual dollar retention rate improve from the current 82%. The industry average sits at 84%.
  • Last quarter the company announced the acquisition of Metromile, which should close in the second quarter of this year. 
  • Investors will be looking for continued growth across the board with some insights on how well or badly the release of car insurance has been. 
  • According to IBISWorld, the current automobile insurance market in the US is $311 billion and has grown 2.3% for the past five years. If Lemonade manages to get just 1% of it, that would be almost twice as much as its current market capitalization ($1.62 billion).

For the full insights, do watch the video below, and consider subscribing. 

*Stock prices used were the closing prices of Feb. 18, 2022. The video was published on Feb. 20, 2022.