Lemonade reports strong customer growth despite Q2 loss

In its first-ever earnings report, insurtech firm Lemonade reported a $21M net loss in the second quarter of 2020. The company’s gross earned premium of $35M was $19M higher the same period a year ago, and Lemonade’s customer number, at 814,000, was up 84% year-over-year.

Why should we care?

Despite a second-quarter loss, Lemonade, which went public in July, is showing resilience during the pandemic. While COVID-19 has negatively affected some property and casualty insurers, Lemonade has held its own. Operating expenses increased 12% year-over-year, but they were offset by lower sales and marketing costs. After a brief staffing freeze in the weeks following the pandemic’s onset, the company resumed hiring, adding dozens of new employees to support remote onboarding. The company also launched pet insurance, part of a strategy to garner stickier customer relationships over time. As digital financial services gain momentum, the outlook for Lemonade is positive. “The pandemic has accelerated digitalization in numerous aspects of life, including insurance, making Lemonade’s purely direct offering even more attractive,” Morgan Stanley reported.