Lemonade’s premium per customer is $360

Lemonade hosted its Q2’23 earnings call on Aug 3, 2023. Select highlights:

• In Q2 2023, there was a strong performance across the board with continued loss ratio progress despite CAT headwinds, marketing efficiencies, and expense control.
• In-force premium (IFP) grew 50% in Q2 compared to the prior year, reaching $687 million.
• Customer count increased by 21% to 1.9 million compared to the prior year, with premium per customer increasing by 24% to $360 driven by volume growth and mix shift.
• Annual dollar retention (ADR) improved by 4 percentage points to 87% compared to the prior year.
• Gross earned premium in Q2 increased 53% to $164 million, and revenue increased 109% to $105 million, driven by an increase in gross earned premium and a reduction in the proportion of premium ceded to reinsurers.
• Gross loss ratio in Q2 was 94%, with the impact of CATs contributing roughly 21 percentage points within the gross loss ratio.
• Operating expenses, excluding loss and loss adjustment expense, increased 9% to $95 million in Q2 compared to the prior year, primarily driven by increased personnel expense and legal and professional fees due to the Metromile acquisition.
• Net loss in Q2 was $67 million, and the adjusted EBITDA loss was $53 million.
• The total cash, cash equivalents, and investments at the end of the quarter were approximately $942 million.
• For the third quarter of 2023, the company expects in-force premium to be between $703 million and $706 million, gross earned premium between $166 million and $168 million, revenue between $102 million and $104 million, and an adjusted EBITDA loss between $51 million and $49 million.
• For the full year 2023, the expectations include in-force premium between $710 million and $715 million, gross earned premium between $654 million and $658 million, revenue between $402 million and $408 million, and an adjusted EBITDA loss between $199 million and $196 million.