added by sari · updated 8mo ago
The Diff | Byrne Hobart | Substack
- The third piece is essential to understanding the Lemonade bull case. Their renter’s insurance product is incrementally cost-competitive only because overhead dominates their competitors' costs, and Lemonade’s cost structure is more fixed. But in 2019 they spent $175m in operating expenses to produce $13.1m in gross profit, which is not a sustainab... See more
from The Diff | Byrne Hobart | Substack by Byrne Hobart
sari added 3y ago
- The big tailwind is that reinsurers are overcapitalized. Anecdotally, reinsurers are not asking how to get more capital, but they’d really like to find something to do with their existing capital. This means Lemonade can grow using someone else’s balance sheet.
from The Diff | Byrne Hobart | Substack by Byrne Hobart
sari added 3y ago
- The uncertain one: Lemonade thinks the industry doesn’t acquire enough customers online, and that this locks them out of low-premium policies. But Lemonade is also betting that they can convince customers to spend more over time.
from The Diff | Byrne Hobart | Substack by Byrne Hobart
sari added 3y ago