Insurance technology company Lemonade (NYSE: LMND) has certainly grown impressively. In the most recent quarter, the company’s in-force premium nearly doubled year-over-year, while its loss ratio narrowed considerably. What’s more, Lemonade reported that it ended 2020 with more than 1 million active customers — after just over four years in business. It took both State Farm and GEICO well over 20 years to reach that same milestone.
Lemonade’s business model seems to be resonating with consumers, especially younger generations who simply don’t want to deal with insurance agents, lengthy applications, or confusing and inefficient claims. Lemonade customers can get insurance quotes in seconds, buy policies in minutes, and get paid for claims at speeds that customers of traditional insurance companies often have trouble believing. In fact, just before writing this, I read a tweet from a customer who filed a pet insurance claim with Lemonade and was shocked that the claim was processed in six seconds after submitting the required documentation.