Lemonade, an AI-driven insurtech unicorn, has surpassed $1 bn in In Force Premium (IFP), reaching this milestone 8.5 years after selling its first policy. This reflects a compound annual growth rate of around 150%.
The company attributes its rapid growth to its focus on technology, diverse product range, and wide geographic presence, as well as consistent efforts to improve customer experience.
Lemonade has released its Q4 and full year 2024 financial results. In the fourth quarter of 2024, Lemonade’s gross profit rose by 99% year-over-year to $64 mn.
Despite this gain, the company reported a net loss of $30 mn, an improvement from the $42.4 mn loss in Q4 of the previous year. The reduction in loss was mainly driven by growth spending.
Shai Wininger, President and cofounder of Lemonade, noted the significance of surpassing $1 bn in IFP, emphasizing positive free cash flow and a healthier loss ratio.
Surpassing $1B in IFP with positive free cash flow and a healthy loss ratio is an important milestone for us. We’ll take a minute to celebrate today’s achievement, and get back to work on our journey to our next 10x!
Shai Wininger, President and cofounder of Lemonade
Lemonade delivered a strong positive cash flow quarter, generating $27 mn of adjusted free cash flow (Adj. FCF). This capped the company’s first full year of positive Adj. FCF at $48 mn.
In Force Premium (IFP) reached $944 mn, marking a 26% year-over-year increase. This represents the fifth consecutive quarter of accelerating growth. Revenue rose by 29%.
The company recorded a gross loss ratio of 63% for the fourth quarter, the best result to date. The trailing twelve months (TTM) gross loss ratio stood at 73%, aligning with the target range.
This represents a 12-point improvement compared to the previous year and a 4-point sequential improvement. It also marks the sixth consecutive quarter of improvement in the TTM gross loss ratio.
Gross profit increased by 90% year-over-year to $64 mn, with a margin expansion of 14 points to 43%. For the full year 2024, gross profit nearly doubled to $167 mn, up 98% year-over-year, setting a new record for the company.
Adjusted EBITDA loss improved by 18% year-over-year to ($24) mn, while the net loss decreased by 29% to ($30) mn. Notably, adjusted EBITDA, excluding growth spending, turned positive for the first time in the fourth quarter.
Lemonade Car has launched in Colorado on March and plays a major role in the company’s growth strategy.
This expansion will increase Lemonade’s coverage to nearly 40% of the US car insurance market.
Colorado presents a significant opportunity, with residents spending about $7 bn annually on car insurance. Existing Lemonade customers in the state already contribute hundreds of millions of dollars to that total.
Lemonade offers renters, homeowners, car, pet, and life insurance. Powered by artificial intelligence and social impact, Lemonade’s full stack insurance carriers in the US and the EU replace brokers and bureaucracy with bots and machine learning in insurance, aiming for zero paperwork and instant everything.
A Certified B-Corp, Lemonade gives unused premiums to nonprofits selected by its community, during its annual Giveback.
Lemonade is currently available in the United States, Germany, the Netherlands, France, and the UK, and continues to expand globally.
