Lemonade’s pet book is getting bigger

Lemonade released its quarterly statements for its two carrier subsidiaries – Lemonade Insurance Company and Metromile Insurance Company.

As of June 30, 2023, 70% of Lemonade’s written premiums originated from its renters/home segment and 29% are attributed to its pet business. For comparison, in the first six months of 2022, Lemonade’s renters/home business made up three-quarters (75%) of overall premiums and its pet business accounted for nearly a quarter (24%).

Lemonade’s auto business, which became available in Illinois in November 2021, accounted for just 1.5% of premiums in the first six months of 2023.

When it comes to Metromile, the carrier has experienced a noticeable premium decline ever since Lemonade completed the acquisition in July 2022. The company ended the first six months of 2023 with $49 million in written premiums, a 15% decrease compared to the same period in 2022. In terms of dollars, the most significant decrease occurred in California, which accounts for over 50% of Metromile’s business. The company saw premiums decline in every state it operates in.

From a marketing perspective, Lemonade is no longer in the red – at least from one point of view. Lemonade Insurance Company has an MGA agreement in place with Lemonade Insurance Agency whereby it pays LIA a commission equal to 25% of gross written premiums. The table below shows Lemonade’s sales and marketing expense and the commission it received for the written premiums.

For the first six months in 2021, Lemonade spent a dollar and a half in marketing for each dollar it received in commission. In 2023, the company spent 70 cents in marketing for every dollar it earned.

PeriodSales & Marketing ExpenseCommission ReceivedRatio
Jan-Jun 2021$62M $41M1.5
Jan-Jun 2022$75M $59M1.3
Jan-Jun 2023$53M $73M0.7