Lemonade’s automation index continues to decline
In September 2018, Lemonade shared their ‘Automation Index’ with the industry – an efficiency measure that tracks the ratio of customers to team members. In September 2016, Lemonade’s automation index stood at 5 – it had 96 customers and 21 people on staff. But in September 2018, Lemonade’s index read 2,500 as the 100-person company counted over 250,000 customers. This figure made Lemonade the clear “winner” with State Farm coming in second.
Since Lemonade’s business mix isn’t as renters-focused as it used to be, the automation index has been declining.
Lemonade recently shared its 2022 annual report and it decided to highlight their automation index (which has further declined) in comparison to others once again. “As of December 31, 2022, and based on public information from five competing insurance companies in the United States, we estimate that the number of customers per employee for those companies ranges from approximately 150 to approximately 450 customers per employee. We base this estimate on publicly available information, which we have adjusted for comparability. The calculation of “employees” includes insurance agents and brokers because they are a significant cost component for other insurance companies. In comparison to these competitors, our number of customers per employee was approximately 1,300 as of December 31, 2022.”
It’s worth noting that in Lemonade’s original post, it made the clear distinction between employees and agents but now employees of other insurance companies include agents and brokers. In addition, Lemonade only used company employees (1,367) to calculate its index without taking into account the brokers and agents it works with.
Bottom Line: Sometimes you need to make the numbers look better.