2017 ended badly for Israeli insurtech startup Lemonade according to "The Insurance Insider" correspondent Ted Bunker. He reports that Lemonade filed statutory reports with US regulators showing "ballooning net premiums earned along with surging underwriting losses."
Lemonade, which provides renters and homeowners' cover through mobile devices, had $2.3 million in earned premiums last year and an underwriting loss that rose more than eightfold to $15.8 million, according to S&P Global data. "The Insurance Insider" adds that the startup's pre-tax operating loss also soared more than eightfold from $1.99 million in 2016 to $15.7million in 2017.
The article adds that gross insurance premiums rose strongly in 2017 to $9 million from just $180,000 in 2016, the startups first year of operations.
Lemonade, which was chosen as one of "Globes" startups of the year in 2017, recently completed a $120 million financing round and has raised $180 million to date. The company was founded in 2015 and began operations in October 2016. It currently has a license to operate as an insurance company in 27 US states, and it has launched operations in 10 of them.
Lemonade was founded by president Shai Wininger and CEO Daniel Schreiber.
Schreiber said that the company sold insurance premiums of $10 million in 2017 and had $15 million expenses so that the losses were significantly smaller than reported. Furthermore, he points out that only 5% of 2017 revenue was from the first quarter of 2017 while 50% of revenue was from the fourth quarter. Consequently, Schreiber notes in a blog that the loss ratio from premiums fell from 368% in March 2017 to "just" 137% in September 2017.
In any event, he adds that the company is an early stage startup where losses are expected.
Published by Globes [online], Israel business news - www.globes-online.com - on March 15, 2018
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