Lemonade is looking to build an AI backed underwritten, vertically integrated insurance company. Quick service, instant everything.
Fun facts:
Hold Guinness world record for fastest claim paid
Just crossed 2 million customers
A credit rating
Basic belief: by cutting out agents and brick and mortar costs they will be able to deliver a necessary evil (insurance) at a lower cost at scale. Inspired by Buffett’s purchase of GEICO in the 1950s when he realized that GEICO did paper forms by mail instead of using agents. They believe if they target renters policies with low ad competition and then delight those customers they will graduate their insurance with Lemonade as their needs expand for a fairly low CAC.
Challenges:
need to scale, all insurance lines are not available in all states which limits their ability to bundle and save is a current competitive disadvantage
AI underwriting needs testing: so far their loss ratios have not been good. Will their human off approach scale
Recent news:
Better than expected results caused a short squeeze, upped guidance, believe profitability will be achieved sooner that previous.
Most recent shareholder letter: https://s24.q4cdn.com/139015699/files/doc_financials/2023/q3/SHL_Q3_2023_FINAL.pdf
Enough about me, what about you?
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