What happened

The stock market was having a generally negative day on Thursday as the situation in Ukraine has added tremendous uncertainty. As of 10 a.m. ET, the Dow Jones Industrial Average had declined by about 800 points and most other major indexes were firmly in negative territory.

However, insurance technology company Lemonade (LMND 2.22%) was performing even worse. Shares were down by nearly 10% and were trading at their lowest level ever, although they were considerably off the day's lows.

So what

Lemonade reported its fourth-quarter 2021 earnings on Wednesday afternoon, and investors don't seem too impressed.

To be fair, the news wasn't all bad. Lemonade now has 1.43 million customers, while it had just hit 1 million at this point a year ago. And the company's fourth-quarter revenue came in ahead of expectations.

Beyond that, however, the news wasn't very good. Guidance for 2022 failed to meet expectations, and the company's 96% loss ratio isn't even close to management's stated 75% target. It's also becoming difficult to see a path to profitability -- after all, Lemonade generated $41 million in revenue for the fourth quarter but posted a net loss of more than $70 million.

Glass of lemonade splashing.

Image source: Getty Images.

Now what

Looking forward, Lemonade will need to show investors that it can scale its business in a profitable manner. Excessive underwriting losses will only become more painful as the business gets larger, so it's imperative the company get this under control.

It's also worth noting that the Lemonade Car auto insurance offering is just getting ramped up in Illinois, and the early results have been strong. If the company can expedite the rollout in other states, it could help boost growth in 2022 and beyond.