Lemonade, Inc. Oppenheimer 29th Annual Technology, Internet & Communications Conference

Hi, Tim. Jason, how are you?

Sure. For Lemonade, growth is a gift, right? More growth is better. That's not always true in insurance, and historically, it's often been the opposite. For many insurance companies, growth and profit were at odds. You had to choose one. For us, it's typically the opposite. More growth typically leads to faster learning, more improvements, and you said it yourself, something like 11 quarters sequentially in a row of more rapid growth, accelerating growth, and at the same time, significant profitability improvements, loss ratio improvements during that whole period. From a go-forward basis, we've kind of set 30% plus as our marching orders. We first indicated that, I think, at our last investor day, which is almost two years ago at this point. And we've done it and then some, and we've gotten 30% and then grown that a little bit each quarter.

I don't know that you can accelerate every quarter forever. There's a limit to that, I think. And I think to the question of what can get in the way or what can offset that or slow that is it's really of our choosing. As long as we can acquire profitable customers, a lifetime value that's forecast by us and by our models that's healthy, we can grow at that rate. And we've indicated 30% plus as far as the eye can see. And the good news is, since we made that declaration two years ago, we've been able to do it at ever-increasing absolute numbers, higher gross spend dollar amounts, though the growth rate is slowing somewhat, again, by our choosing. And maintaining the marketing efficiency and the kind of march toward EBITDA breakeven. We've indicated that's just around the corner.

So we feel very comfortable with that 30% plus. Our ambition is more. Our ambition is to increase that a little bit each quarter versus what is more typical, which is a flattening or a decline. That day might come, but our ambition is to continue the trend.

Sure. I think premium per customer is a good output. It is not a great input, but it is a good metric to track. There is some noise there, particularly as our Europe business grows quite rapidly. The premium per customer in Europe, even though it is both renters and home, is relatively low compared to the U.S. business. A home policy in the U.S. is quite a bit higher. You have to be a little cautious in just looking at absolute customer numbers. In terms of premium per customer, I think our current theme will continue. We have seen a roughly 8% year-on-year growth rate. I think you will continue to see that, should expect that the remainder of this year, probably through next year.

Looking out a little further into 2028, late 2027, 2028, and beyond, I think there will be upward pressure on that premium per customer, where that growth rate might move up a bit versus down from that 8% run rate. That, I think, is really driven by mix shift. I think when you see our current pet growth rate and car growth rate in the 50s versus the overall growth rate in the 30s, you really start to see that play out in the numbers in those out years. I would think of that 8% as edging upwards a couple of years from now.

Sure. More of the same. Generally, we expect car will grow because of the TAM and because of our efforts at quite a bit faster than the overall business. The state rollout is interesting, but it's not indicative, I think, of the trajectory or the growth rate much, meaning more states is good, more population's better. But we're in more than 40% of the U.S. population already, even though the number of states it's a dozen or so, but more than 40%. By next year, that should be more than 50%. While it's 50 is less than 100, it's moving pretty nicely. The growth rate of our autonomous product in terms of coverage is pretty notable. The premium is negligible, but I would look to the pattern of expanding coverage as a theme for Lemonade. We'll expand in traditional car states.

We're now up to 5 car states already in the autonomous Tesla partnership product. Our ambition ultimately for sure is 50 states for all products, but our growth trajectory is not hindered in any way by the pace of expansion. At this point, the driver is really regulatory hurdles. We've become quite efficient at the rate filing process. That was not true 3 or 4 years ago. We were kind of new to the game, and we had to build that team, build that skill, build those muscles, and we've done that. One of the places we're seeing the most AI automation benefit is in those filings.