Lemonade's Fourth Quarter: Soaring Loss Ratio

Investors hoping for better news from Lemonade (NYSE: LMND) were in for a rude surprise last week as the company released its fourth-quarter earnings report. It was a typical report from the insurance technology company, which means that it showed signs of high growth, but also a higher loss ratio and increased losses.

Management says it's all part of the plan, and that the company's strategy is working the way it's supposed to. Should investors wait it out?

Lemonade excited investors when it went public last year. It's a digital insurance company with an artificial intelligence-powered platform that makes signup simple and fast, and insurance claims can get approved in as little as one second. This is a big departure from the decades-old traditional insurance model, where customers typically have to sit with an agent at an office and fill out paperwork for both creating a policy and filing a claim.

Source Fool.com