Digital Insurer Now Boasts Over 2.4 Million Prospects
In slightly below a decade, digital-first insurance coverage firm, Lemonade, has logged a significant milestone asserting it has reached $1 billion in in-force premium (IFP) in 2025. The corporate attributes its success since its founding to fast progress throughout a number of product strains and geographic markets.
“Surpassing $1B in IFP with optimistic free money movement and a wholesome loss ratio is a crucial milestone for us,” stated Shai Wininger, Lemonade President and cofounder. “We’ll take a minute to have a good time right now’s achievement and get again to work on our journey to our subsequent 10x!”
Outlining its achievements in its newest quarterly earnings report, Lemonade famous that IFP grew 26% year-over-year to $944 million as of December 31, 2024, capping off what it known as its “finest quarter ever” with $27 million in adjusted free money movement. Web loss narrowed to $30 million within the fourth quarter, in comparison with a $42 million loss a yr earlier. Adjusted EBITDA loss improved to $23.8 million from $28.9 million in This autumn-2023.
As for Lemonade’s gross loss ratio for This autumn-2024, it was 63%, its lowest on report, having improved by 4 factors sequentially. For the complete yr, the gross loss ratio was 73%, throughout the firm’s long-term goal vary. Gross revenue rose 90% year-over-year within the quarter to $64 million.
The corporate additionally emphasised that it achieved full-year optimistic adjusted free money movement of $48 million for the primary time in its historical past, aided partially by the financing construction of its Artificial Brokers program. In line with the shareholder letter, 80% of progress spending was funded by associate Basic Catalyst.
Launches Auto Product in Colorado
As a part of its continued enlargement, Lemonade introduced it should launch its Lemonade Automobile product in Colorado on March 26, 2025. With this transfer, Lemonade Automobile can be obtainable in states representing roughly 40% of the U.S. auto insurance coverage market.
Lemonade described Colorado as a promising auto market, noting its present buyer base within the state already spends “a whole lot of tens of millions” yearly on auto insurance coverage. Complete auto insurance coverage premiums in Colorado are estimated at $7 billion yearly, the corporate stated.
The corporate views Lemonade Automobile as a key driver in its long-term progress technique, as outlined throughout its November 2024 Investor Day. Executives shared plans to scale the enterprise tenfold by way of additional automation, knowledge science, and geographic enlargement.
Pet Insurance coverage Progress, Wildfire Affect Famous
Lemonade’s pet insurance coverage phase reached $283 million in IFP at year-end, rising 57% from the prior yr. The corporate highlighted operational effectivity and underwriting precision within the pet phase, citing a loss ratio of 69% and a discount in price per declare to $19.
The corporate additionally disclosed a preliminary estimate of $45 million in gross losses and $20 million in adjusted EBITDA influence because of the January 2025 California wildfires. Lemonade credited diversification throughout product strains and underwriting revisions for mitigating what it stated may have been losses 5 instances increased.
2025 Outlook
Wanting forward, Lemonade says it’s guiding towards IFP progress of 28% in 2025, projecting $1.2 billion in IFP by year-end. Income is anticipated to succeed in roughly $656 million. Regardless of planning a 40% improve in progress spend, the corporate expects continued enchancment in adjusted EBITDA and its second consecutive yr of optimistic adjusted free money movement.
The corporate’s excellent money and investments totaled roughly $1 billion at year-end, together with $271 million held as regulatory surplus in its insurance coverage subsidiaries.
