This bested the high end of management’s guidance of $339 million and was a sharp increase from the $297 million it had at the end of last quarter.
Lemonade started as renters insurance, but management talked about the success of it newer offerings.
Lemonade Car only launched last week, but the company is already doubling down by acquiring competitor Metromile for $500 million in an all-stock deal.
It even lowered its guidance for adjusted earnings before interest, taxes, depreciation, and amortization , now guiding for an EBITDA loss of $185 million to $183 million.
Second, Lemonade’s loss ratio got worse in Q3 — a troubling sign for an insurance company.
Therefore, if anything, the older products should be improving more than newer ones for the AI to demonstrate its merits.
Management is excited because it quickly adds customers and, more importantly, customer data to feed its AI algorithms. However, Metromile’s second-quarter net loss of $48 million is almost as big as Lemonade’s, despite it being a much smaller business.