The Biggest Number From Lemonade's Latest Quarter: 94%
Lemonade (NYSE: LMND) reported its results for the second quarter not too long ago. Revenue totaled $105 million, up 109% year over year. And the business now has 1.9 million customers. Those figures look good on their own, but the stock has dropped 42% since the announcement.
There might be a reason for the heightened investor pessimism. The artificial intelligence (AI)-enabled insurance provider had one specific metric that stood out in its Q2 report. Here's why the gross loss ratio of 94% was the biggest number from Lemonade's latest financial update.
While it can seem complex at first glance, a typical insurance company operates by taking in premiums from its policyholders and paying out claims when these customers incur an insured loss. A business that can better manage risk pays out less in claims, while one that might not have the same level of proficiency pays out a higher amount. The figure that measures the amount of premiums that go out as claims is called the gross loss ratio. It's the key to understanding any insurance company's success (or lack thereof).
Source Fool.com
