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Insurance is a very different business model from tech business models. Losses that are single-digit percentages of revenue are not bad, especially for a compan
by gen220 6y ago
Insurance is a very different business model from tech business models. Losses that are single-digit percentages of revenue are not bad, especially for a company that's investing in growth. Shrinking loss while growing actually shows that they have very good traction.
Price sensitivity can be a good thing for a competitor, and tech actually does help their business (see my cousin comments in this thread).
I work in insurance tech, but not for Lemonade or anyone affiliated with them.
- bsamuels 6y agohow do you tell the difference between investing in growth and poor underwriting discipline in such a young company?
- gen220 6y agoIt's a good and fair question, and it's one you can answer by looking at their loss ratio trajectory. You expect to see it really high in the beginning (while they're learning how underwriting works), and to logarithmically decline over time, tending to plateau somewhere reasonable. That's what their loss ratio trajectory looks like, so far.
- deleted 6y ago[deleted]