Meanwhile, 73% of its premiums were from customers of less than 24 months 

Insurtech unicorn Lemonade has reported in-force premiums (IFP) of $458m (£375.4m) for Q2 2022 – this figure was an increase of 54% compared to Q2 2021, according to a letter from Lemonade to its shareholders, dated 8 August 2022.

IFP refers to aggregate annual premiums for customers as of the period end date.

Meanwhile, adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) for Q2 was $50m (£40.9m).

Gross earned premium was $107m (£87.7m), up from $67m (£54.9m) in Q2 2021.

Customer count increased by 31% to 1,579,936 compared with Q2 2021. Lemonade also noted that 73% of its premiums earnt in Q2 were from customers who joined less than 24 months ago.

In terms of losses, Lemonade expects these to peak in Q3 and continue to shrink thereafter.

In an earnings call yesterday (9 August 2022), Daniel Schreiber, Lemonade’s chief executive, said: “I’m very happy to say that the year kicked off with a very strong first quarter – both our top and bottom line came in above expectations.”

Echoing this, the shareholder letter noted: “Our top and bottom lines came in ahead of our expectations. This belies the global financial picture and it is noteworthy that one would struggle to detect the macroeconomic downturn based on our internal dashboards.

“This is less a credit to Lemonade than a reflection of the fact that we operate in an industry that is largely impervious to recessions, supply chain interruptions and bear markets – and that we have a diversified portfolio of products and regions that enable us to offset local issues through rebalancing.”

It pointed to two areas where macroeconomic impacts on Lemonade’s business had been felt – inflation and cost of capital.

Schreiber noted that this quarter was also “bit of a milestone”, with the insurtech offering a full suite of products – including renters’ home, life, pet, and car in one market – meaningthat first-time policyholders could access  one “mega-bundle” via the app. This bundle is currently only available in the US states of Illinois and Tennessee. 

He continued: “These markets offer an early peek in how meaningful growing with our customers can become as we roll out these products nationwide. Growing without customers has long been a central plank of our strategy and the early dynamics we see in Illinois and Tennessee reinforce that.”

Very significant

In Illinois, Lemonade saw bundle rates climb by 40% in one quarter alone compared to the rest of the country.

Schreiber said this was “very significant” as policyholders with two or more Lemonade products outspent customers with singular products by three to one.

For customers with three products this was seven to one and for those with all four products the ratio jumped from nine to one.

The insurtech has always adopted a strategy that it “wants to be there for its customers as they go through predictable lifecycle events” such as buying a car, a home and starting a family.

This, Schreiber said, boosted the insurtech’s bottom line aswell as its top line.

  • Insurance Times has converted dollar amounts into pounds using an exchange rate of £1 = $1.22, which was correct as of 1 August 2022.