In this video, I will go over Lemonade's (LMND +0.26%) fourth-quarter earnings. As a shareholder since the IPO, I wasn't pleased with this quarter, and next quarter's guidance is weak. You can find the video below, but here are some of the highlights.
- In-force premium (IFP) grew 78% year over year (YOY) with IFP of $380 million and about 1.42 million customers, up 45% YOY.
- Premium per customer increased 25% YOY to $266. Gross earned premium increased 79% YOY to $89 million.
- Gross loss ratio was 96%, which is 23% higher than a year ago. The driver of this increase is an unfavorable prior-period development due to a handful of older large losses for which the company under-reserved.
- In the future, the company expects loss ratios across all Lemonade product lines to be below 75%.
- The company expects 2022 to be the year of peak losses.
- The acquisition of Metromile should be completed in the second quarter.
- The company expects total annual IFP to grow approximately 70% during 2022.
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*Stock prices used were the closing prices of Feb. 23, 2022. The video was published on Feb. 24, 2022.
