Insurtech unicorn Lemonade reduced its Q2 2025 net loss by 23%, reporting a loss of $44 mn as premium volume continued to climb. Net earned premiums rose to $112.5 mn, up from $89.3 mn year-over-year. In-force premium reached $1.08 bn, marking a 29% annual increase.
Despite improving topline results, the net loss ratio deteriorated by 20 points, reaching 99.
The company noted stronger performance in U.S. auto as well as growth in European renters and homeowners, particularly across Germany, France, the UK, and the Netherlands. Lemonade now serves over 250,000 policyholders in those four markets.
Management highlighted Europe as a long-term growth engine, citing lower catastrophe risk and a regulatory structure that allows real-time pricing and underwriting adjustments without the delays of rate filings.
Its platform, built with automation from the ground up, operates efficiently across borders without large teams or country-specific systems.
The company credited its AI-based approach for maintaining cost efficiency while expanding across markets. It said the tech stack allows it to launch new products and adjust pricing across multiple jurisdictions while keeping operational costs low.
In the U.S., Lemonade continued to invest in auto insurance, expanding to Colorado in Q1 and Indiana in July.
Earlier in the year, it improved conversion rates by applying telematics earlier in the user journey.
The insurtech crossed $1bn in in-force premium in March, eight-and-a-half years after writing its first policy. Total customer count rose 24% to 2.7mn, while premium per customer grew 4% to $402.
Lemonade also adjusted its reinsurance structure under its July 1 renewal. The proportional quota share cession rate dropped to 20% from 55%, a move the company described as appropriate for its current maturity and supported by more stable underwriting results.
In parallel, it increased reliance on its captive, Lemonade Re, to optimize capital usage while maintaining growth targets.
Lemonade reported a net loss of $62.4mn for the first quarter 2025, up from $47.3mn in the same period last year.
The increase was primarily due to losses linked to the January wildfires in Los Angeles and a $6.9mn assessment from the California FAIR Plan, the state’s insurtech of last resort.
Operating expenses, excluding net loss and loss adjustment expenses, rose 29% to $127.2mn. This was driven by the FAIR Plan assessment and increased spending on customer acquisition.
The company estimated the wildfires’ total negative impact at approximately $22mn, according to a shareholder letter.
Net earned premium grew to $104.3mn, compared to $84.4mn a year ago. However, the net loss ratio deteriorated by 15 points, reaching 93.
