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

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.