Where Will Lemonade Be in 1 Year?
Lemonade (NYSE: LMND) posted another quarter of outstanding growth and improving profitability in the 2023 second quarter. But like many of its reports since going public in 2020, this one also showed a struggle with its loss ratio, or how much it pays in claims versus premiums collected. Can it ever get this important metric under control? Let's check out the possibilities and see where it could be at this time next year.
At least one area where Lemonade isn't showing any signs of trouble is in increasing its top-line metrics. These continue to grow at high double-digit percentage rates. In-force premium, which is the average policy multiplied by customer count and is what Lemonade uses for its main top-line metric, increased 50% over last year. The average premium per customer increased 24% to $360, and the customer count increased 21% to more than 1.9 million. The customer increases are quite impressive, as it's grown to nearly 2 million customers in a relatively short time.
This is an important part of Lemonade's growth strategy, which is capturing clients when they're young and upselling and cross-selling as they grow into new life-cycle events. It's evidently working, as illustrated by the robust increases in average policy amounts and total revenue. Revenue increased 106% over last year to $56 million.
Source Fool.com
