Lemonade ends Q2 with $57 million loss

Lemonade released its Q2 2024 results, ending the quarter with 2,167,194 customers, a 14% year-over-year increase. The company added ~72k customers to its overall count during the quarter.

In-force premium reached $839 million, an increase of 22% compared to the same period last year.

Premium per customer stood at $387, 8% higher compared to Q2 2023.

The company spent $36.8 million on sales and marketing during the quarter, compared to $24.8 million in Q2 2023.

Gross loss ratio for the quarter was 79%, a 15% year-over-year improvement.

Combined ratio for the quarter was 198%, compared to 223% in Q2 2023.

Net loss for the quarter stood at $57.2 million, an improvement of 15% compared to the same period last year. For the first six months of the year, Lemonade reported a net loss of $104.5 million.

The company was net cash flow positive during the quarter. Currently, the company has $931 million in cash, restricted cash, and investments.

Lemonade said that reducing CAT-related volatility has been a major focus, and the company has implemented the following strategies:

• Growing products with lower CAT exposure, notably pet & renters
• Geographic consideration when it comes to homeowners growth, including diversification via Europe
• Continuing to sell Lemonade homeowners policies only where its AI powered LTV models predict attractive unit economics
• Placing home premium with other carriers in select geographies to ensure the company is able to deliver a sustainable, long term solution for all customers
• Begun non-renewing certain CAT-exposed homeowners policies that the company would not underwrite today, given what its AI-powered LTV models have learned.

The company added that this effort will ramp up considerably in the second half of 2024, impacting IFP by roughly $20-25 million.