Lemonade, Inc.
For the period ended Dec 31, 2025. Filed Feb 25, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 25, 2026
LMND$39.55-4.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-26.
0001691421-25-000031
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-25.
0001691421-26-000016
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 203 previous paragraphs and 198 current paragraphs.
147 unchanged; 41 reworded; 9 added; 15 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Changing U.S. and global conditions may impact our business. Evolving U.S. trade policy, including tariffs imposed on imported goods in 2025, could affect our claims costs. In February 2026, the United States Supreme Court ruled that the use of the International Emergency Economic Powers Act ("IEEPA") to impose tariffs was not authorized by Congress, invalidating a significant portion of tariffs that had been in effect since April 2025. While the ruling struck down the IEEPA-based tariffs, it does not prevent the administration from imposing tariffs using other legal authorities. Following the ruling, the administration invoked alternative statutory authorities imposing a global tariff, and the administration has indicated its intention to continue to pursue alternative statutory mechanisms to reinstate or impose new tariffs. Tariffs on building materials may increase home repair costs, tariffs on automotive parts may increase vehicle repair and replacement costs, and tariffs on consumer goods may increase the cost of replacing covered personal property. To the extent tariff-driven cost increases are sustained, we may seek premium rate adjustments, subject to regulatory approval in applicable states; however, there may be a lag between when we experience increased claims costs and when we are able to implement corresponding rate increases, which could negatively impact our loss ratios in the interim. More broadly, inflation, whether driven by tariffs, supply chain disruptions, labor market conditions, or other factors, if any, has impacted and could continue to our claims costs, product pricing and investment yield, among other impacts. Capital market volatility may also affect our investment portfolio and access to capital. The actual effects of these macroeconomic factors on our results remains to be unknown and cannot be estimated with precision.
Current report
Ceded written premium decreased $106.1 million, or 21%, to $407.8 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to impact of our reinsurance program effective July 1, 2025. See "Reinsurance" above for further information.
Current report
General and administrative expense increased $15.3 million, or 12%, to $139.8 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. Interest expense related to borrowings from financing agreement with GC increased $11.1 million, or 179%, as compared to the year ended December 31, 2024. Bad debt expense increased by $11.1 million, or 101%, as compared to the year ended December 31, 2024. Employee related expense, including stock-based compensation, increased by $10.1 million, or 18%, as compared to the year ended December 31, 2024. Software increased by $1.0 million, or 17%, as compared to the year ended December 31, 2024. Depreciation and amortization expense decreased $4.8 million, or 24%, as compared to year ended December 31, 2024. During the second quarter of 2025, we recorded $11.7 million of tax refund received under the Employee Retention Credit program and $2.3 million of gain on early lease termination related to the Company’s office space in San Francisco.
Current report
(1) Includes the impact of canceled unvested warrant shares for contract year 2 related to the termination of the Warrant Agreement with Chewy of $5.2 million for the year ended December 31, 2025 and compensation expense related to the warrant shares of $6.5 million for the year ended December 31, 2024, respectively (See Note 16 of the consolidated financial statements).
Current report
(2) Includes the California FAIR Plan assessment of $6.9 million related to the January 2025 California Wildfires for the year ended December 31, 2025 (See Note 20 of the consolidated financial statements).
Current report
(3) Includes $11.7 million of tax refund received under the Employee Retention Credit Program for the year ended December 31, 2025 (See Note 17 of the consolidated financial statements).
Current report
(4) Includes $2.3 million of gain on early lease termination related to the Company's office space in San Francisco for the year ended December 31, 2025 (See Note 21 of the consolidated financial statements).
Current report
(5) Includes $1.0 million of gain from settlement of previously disclosed data security matter for the year ended December 31, 2025 (See Note 20 of the consolidated financial statements).
Removed paragraphs (15)
Previous report
General economic inflation has increased and there is a risk of inflation remaining elevated for an extended period. We anticipate the effects of inflation impacting our investment portfolio, pricing of our products, and in estimating reserves for unpaid claims and claim expenses. The actual effects of the current and potential future increase in inflation on our results remains to be unknown and cannot be estimated with precision.
Previous report
MIC entered into a Quota Share reinsurance agreement effective January 1, 2022 and expired on June 30, 2023, and was not renewed. Under the terms of the agreement, the Company ceded 30% of premiums and losses to reinsurers.
Previous report
We also entered into a reinsurance program to protect against catastrophe risk in the U.S. that exceed $80,000,000 in losses effective July 1, 2022 and expired on June 30, 2023, and was not renewed
Previous report
Ceded written premium increased $124.8 million, or 32%, to $513.9 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to growth in business across all products and the impact of our reinsurance arrangements. Under the terms of our proportional reinsurance program, we cede approximately 55% of premium and are subject to loss ratio caps and variable commission. Other non-proportional reinsurance contracts were renewed with terms similar to expired contracts. See "Reinsurance" above for further information.
Previous report
General and administrative expense decreased $4.8 million, or 4%, to $124.5 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. During the third quarter of 2023, we recognized nonrecurring items which include an asset impairment charge on the right-of-use asset related to the San Francisco office in the amount of $3.7 million and an accrual for a potential liability claim of $3.0 million related to Metromile. Bad debt expense increased by $2.9 million, or 36%, as compared to the year ended December 31, 2024.
Previous report
(1) Includes compensation expense related to warrant shares of $6.5 million and $2.5 million for the years ended December 31, 2024 and 2023.
Previous report
(2) Includes asset impairment charge of $3.7 million related to the San Francisco office sublease (Note 22) and $3.0 million accrual for a potential liability claim, both related to Metromile for the year ended December 31, 2023.
Previous report
Reinsurance assets
Previous report
The estimation of reinsurance recoverable involves a significant amount of judgment. Reinsurance assets include reinsurance recoverable on unpaid losses and loss adjustment expenses that are estimated as part of our loss reserving process and, consequently, are subject to similar judgments and uncertainties. This estimate requires significant judgment for which key considerations include:
Previous report
•paid and unpaid amounts recoverable;
Previous report
•whether the balance is in dispute or subject to legal collection;
Previous report
•the financial condition of a reinsurer (i.e., liquidated, insolvent, in receivership or otherwise subject to formal or informal regulatory restriction); and
Previous report
•the collectability of the reinsurance recovery for factors such as, amounts outstanding, length of collection periods, disputes, any collateral or letters of credit held and other relevant factors.
Previous report
Intangible Assets and Goodwill
Previous report
Intangible assets are recorded at their acquisition date fair values which involves the use of valuation methodologies and various assumptions that are inherently subjective. Identifiable intangible assets consist of value of business acquired and technology, which are subject to amortization, and insurance licenses and trademark, and are not subject to amortization. These intangible assets were acquired as part of the Metromile Acquisition except for trademark associated with the Company’s name, which was acquired in 2019. Finite-lived intangible assets, which are amortized over their estimated economic lives, are reviewed for impairment only when events occur or there are changes in circumstances indicating that their carrying value may exceed fair value. Impairment exists when the carrying value of intangible assets exceeds fair value. Indefinite-lived intangible assets are not amortized but are rather reviewed for potential impairment on an annual basis, or whenever indications of potential impairment exist.
Reworded paragraphs (41)
Previous wording
In addition to digitizing insurance end-to-end, we also reimagined the underlying business model to minimize volatility while maximizing trust and social impact. To lessen the volatility inherent in an industry directly impacted by the weather, we utilize several forms of reinsurance, with the goal of dampening the impact on our gross margin. The result is that excess claims are generally offloaded to reinsurers, while excess premiums can be donated to nonprofits selected by our customers as part of our annual "Giveback". These two ballasts, reinsurance and Giveback, reduce volatility, while creating an aligned, trustful, and values-rich relationship with our customers. See “Business - Our Business Model” and “Business - Our Product Offerings - Giveback Feature.”
Current wording
In addition to digitizing insurance end-to-end, we also reimagined the underlying business model to minimize volatility while maximizing trust and social impact. To lessen the volatility inherent in an industry directly impacted by the weather, we utilize several forms of reinsurance, with the goal of dampening the impact on our gross margin. The result is that excess claims are generally offloaded to reinsurers, while excess premiums can be donated to nonprofits selected by our customers as part of our "Giveback". These two ballasts, reinsurance and Giveback, reduce volatility, while creating an aligned, trustful, and values-rich relationship with our customers. See “Business - Our Business Model” and “Business - Our Product Offerings - Giveback Feature.”
Previous wording
On June 28, 2023, we entered into a Customer Investment Agreement (the “Agreement”), with GC Customer Value Arranger, LLC (a General Catalyst company) ("GC"). Under the Agreement, up to $150 million of financing will be provided for our sales and marketing growth efforts. The Agreement has a commitment period of 18 months which expires on December 31, 2024 (“Original Commitment End Date”). Under the Agreement, subject to certain terms and conditions specified therein, at the start of each growth period, an Investment Amount of up to 80% of our growth spend (the "Investment Amount") will be advanced by GC. During each growth period, we will repay each Investment Amount including a 16% rate of return based upon an agreed schedule. Once fully repaid, we will retain all future reference income related to each respective Investment Amount.
Current wording
On June 28, 2023, we entered into a Customer Investment Agreement (the “Agreement”), with GC Customer Value Arranger, LLC (a General Catalyst company) ("GC") under which GC agreed to provide up to $150 million of financing for our sales and marketing growth efforts through December 31, 2024. Under the Agreement, subject to certain terms and conditions specified therein, at the start of each growth period, an Investment Amount of up to 80% of our growth spend (the "Investment Amount") will be advanced by GC. During each growth period, we repay each Investment Amount including a 16% rate of return based upon an agreed schedule. Once fully repaid, we retain all future reference income related to each respective Investment Amount.
Previous wording
On January 8, 2024, we entered into an Amended and Restated Customer Investment Agreement (“Amended Agreement”) where GC will provide up to an additional $140 million of financing for our sales and marketing growth efforts beginning from the Original Commitment End Date through December 31, 2025. This was further amended and restated in April 2024 and June 2024 to clarify certain provisions. On February 3, 2025, the Agreement was further amended under which GC will provide up to an additional $200 million of financing from January 1, 2026 to December 31, 2026 for our sales and marketing growth efforts (collectively, with the Amended Agreement, the “Amended and Restated Agreement”). The Amended and Restated Agreement contains standard customary representations, warranties and covenants by the parties, and will continue in effect unless terminated by any party pursuant to its terms.
Current wording
The Agreement has been amended and restated on several occasions to extend the commitment period and increase the financing agreement. On January 8, 2024, the Agreement was amended and restated to provide up to an additional $140 million of financing December 31, 2025. On February 3, 2025, the Agreement was further amended to provide up to an additional $200 million of financing from January 1, 2026 through December 31, 2026 for our sales and marketing growth efforts. In addition, the Agreement was amended in April 2024, June 2024 and December 2025 to clarify certain provisions with no changes to material terms. The Agreement, as amended and restated (the “Amended and Restated Agreement”) contains standard customary representations, warranties and covenants by the parties, and will continue in effect unless terminated by any party pursuant to its terms.
Previous wording
We had $83.4 million and $14.9 million of outstanding borrowings under the Amended and Restated Agreement as of December 31, 2024 and December 31, 2023, respectively. We incurred interest expense of $6.2 million and $0.4 million for the years ended December 31, 2024 and December 31, 2023, respectively, and such interest is included in “General and administrative expense” in the consolidated statements of operations and comprehensive income.
Current wording
As of December 31, 2025, we had $158.1 million of outstanding borrowings under the Amended and Restated Agreement. We incurred interest expense of $17.3 million for the year ended December 31, 2025.
Previous wording
We conduct certain of our operations in Israel and therefore our results may be adversely affected by political, economic and military instability and conflict in Israel and the surrounding region. This evolving conflict has increased global economic and political uncertainty. There is still uncertainty regarding the extent to which the war and its broader macroeconomic implications will impact our operations in Israel. We will continue to evaluate the extent to which this may impact our business, financial condition, or results of operations. These and other uncertainties could result in changes to our current expectations. For additional information, see “Risk Factors - Risks Relating to our Business - We conduct certain of our operations in Israel and therefore our results may be adversely affected by political, economic and military instability in Israel and the surrounding region.”
Current wording
We conduct certain of our operations in Israel and therefore our results may be adversely affected by political, economic and military instability and conflict in Israel and the surrounding region. There is still uncertainty regarding the extent to which the war and its broader macroeconomic implications will impact our operations in Israel. We will continue to evaluate the extent to which this may impact our business, financial condition, or results of operations. These and other uncertainties could result in changes to our current expectations. For additional information, see “Risk Factors - Risks Relating to our Business - We conduct certain of our operations in Israel and therefore our results may be adversely affected by political, economic and military instability in Israel and the surrounding region.”
Previous wording
We maintain proportional reinsurance contracts which cover all of the Company's products and geographies, and transferred, or “ceded,” a specified percentage of the premium to reinsurers ("Proportional Reinsurance Contracts"). We also opted to manage the remaining percentage of the business with alternative forms of reinsurance through non-proportional reinsurance contracts ("Non-Proportional Reinsurance Contracts").
Current wording
We maintain proportional reinsurance contracts which cover all of the Company's products and geographies, and transfer, or “cede,” a specified percentage of the premium to reinsurers. We also manage the remaining percentage of the business with alternative forms of reinsurance through non-proportional reinsurance contracts.
Previous wording
Our proportional reinsurance contracts provides 55% protection on covered risks. We agreed to the terms of our reinsurance program effective July 1, 2023 through June 30, 2024 which included Whole Account Quota Share Reinsurance Contracts by and among the Company, Lemonade Insurance Company ("LIC"), Metromile Insurance Company ("MIC") and Lemonade Insurance N.V. ("LINV"), and each of Hannover Ruck SE, MAPFRE Re, and Swiss Reinsurance America Corporation (collectively referred to as “Reinsurers”) ("Reinsurance Program"). Under the Reinsurance Program, which covers all products and geographies, the Company transfers, or "cedes," a share of premium to the Reinsurers. In exchange, these Reinsurers pay us a ceding commission on all premiums ceded to the Reinsurers, in addition to funding the corresponding claims, subject to certain limitations, including but not limited to, the exclusion of hurricane losses, and a limit of $5,000,000 per occurrence for non-hurricane catastrophe losses. The overall share of proportional reinsurance under the Reinsurance Program is approximately 55% of premium. The Per Risk Cap across the contracts is $750,000. Additionally, the contracts are subject to loss ratio caps and variable ceding commission levels, which align our interests with those of our Reinsurers, and is settled primarily on a funds withheld basis. We renewed the Reinsurance Program effective July 1, 2024 and will expire on June 30, 2025, with similar terms to the contracts that expired on June 30, 2024, except for the limit per occurrence for non-hurricane catastrophe losses which increased to $10,000,000.
Current wording
We agreed to the terms of our reinsurance program effective July 1, 2024 through June 30, 2025 which included Whole Account Quota Share Reinsurance Contracts by and among the Company, LIC, MIC and Lemonade Insurance N.V. ("LINV"), and each of Hannover Ruck SE ("Hannover"), MAPFRE Re Compania De Reaseguros S.A. ("MAPFRE"), and Swiss Reinsurance America Corporation (collectively referred to as “Reinsurers”) ("Reinsurance Program"). Under the Reinsurance Program, which covers all products and geographies, the Company transfers, or "cedes," approximately 55% of premium to the Reinsurers. In exchange, these Reinsurers pay us a ceding commission on all premiums ceded to the Reinsurers, in addition to funding the corresponding claims, subject to certain limitations, including but not limited to, the exclusion of hurricane losses, and a limit of $10,000,000 per occurrence for non-hurricane catastrophe losses. The Per Risk Cap across the contracts is $750,000. Additionally, these contracts are subject to loss ratio caps and variable ceding commission, which align our interests with those of our Reinsurers and is settled primarily on a funds withheld basis. We renewed the Reinsurance Program with Hannover and MAPFRE effective July 1, 2025 and will expire on June 30, 2026, with a reduced effective cession rate of 20% and with other terms similar to the contracts that expired on June 30, 2025.
Previous wording
LIC and LINV entered into a Property Per Risk Excess of Loss Reinsurance Contract with a panel of reinsurance companies (the "PPR Contract"), and LIC entered into an Automatic Facultative Property Per Risk Excess of Loss Reinsurance Contract with Arch Re (the "Automatic Facultative PPR Contract"), each effective from July 1, 2023 until June 30, 2024. Under the PPR Contract, claims in excess of $750,000 are 100% ceded up to a maximum recovery of $2,250,000, subject to certain limitations. The PPR Contract was renewed at similar terms effective July 1, 2024 through June 30, 2025. The Automatic Facultative PPR Contract, in which claims in excess of $3,000,000 are 100% ceded with a potential recovery of at least $10,000,000, subject to certain limitations, expired on June 30, 2024, and was not renewed.
Current wording
LIC and MIC entered into a Property Per Risk Excess of Loss Reinsurance Contract with a panel of reinsurance companies (the "PPR Contract") which was effective July 1, 2024 and expired on June 30, 2025. Under the PPR Contract, claims in excess of $750,000 were 100% ceded up to a maximum recovery of $2,250,000, subject to certain limitations. The PPR Contract was renewed at similar terms effective July 1, 2025 and will expire on June 30, 2026.
Previous wording
We also entered into an Excess of Loss Reinsurance Contract (the "XOL reinsurance contract") through a captive in Bermuda in which we have a variable interest, primarily to cover catastrophe risk over the initial $50,000,000 limit for each loss occurrence, and further subject to a limit of $80,000,000 for each loss occurrence and in aggregate, primarily on property and car business underwritten by LIC. This XOL reinsurance contract became effective July 1, 2023 and expired on June 30, 2024. We have renewed the XOL reinsurance contract effective July 1, 2024 and will expire on June 30, 2025, at similar terms and is expanded to include risks written by MIC.
Current wording
We also entered into an Excess of Loss Reinsurance Contract (the "XOL reinsurance contract") through a captive in Bermuda in which we have a variable interest. This XOL reinsurance contract primarily covers catastrophe risk on property and car business underwritten by LIC and MIC over the initial $50,000,000 limit for each loss occurrence, and further subject to a limit of $80,000,000 for each loss occurrence and in aggregate. This XOL reinsurance contract effective July 1, 2024 expired on June 30, 2025, and was renewed at similar terms effective July 1, 2025 and expiring on June 30, 2026.
Previous wording
We are also exposed to some risks from MIC ceded through the Quota Share Reinsurance Contract (the “QS reinsurance contract”) which is retained in a captive subsidiary, Lemonade Re SPC in the Cayman Islands. This QS reinsurance contract became effective July 1, 2023 and shall remain in force for an indefinite period until terminated by either party.
Current wording
We are also exposed to some risks on property, auto and pet insurance underwritten by LIC and MIC ceded through Quota Share Reinsurance Contracts (the "QS reinsurance contracts") which is retained in an offshore captive subsidiary, Lemonade Re SPC in the Cayman Islands. The MIC QS reinsurance contract which became effective July 1, 2023 was terminated and the parties agreed to a new QS reinsurance contract effective July 1, 2025 on the same terms except for the increase in cession rate to 35% and ceding commission rate effective July 1, 2025. The new MIC QS reinsurance contract will remain effective for an indefinite period until terminated by either party. The LIC QS reinsurance contract became effective on July 1, 2025 and will expire on June 30, 2026.
Previous wording
Gross written premium is the amount received, or to be received, for insurance policies written by us during a specific period of time without reduction for premiums ceded to reinsurers. Gross written premium includes direct and assumed premium. We began assuming premium related to car insurance policies written in Texas in December 2022, in connection with our fronting arrangement with a third party carrier in Texas. We also include gross written premium from the sale of pay-per-mile car insurance policies within the United States following the Metromile Acquisition in July 2022. The volume of our gross written premium in any given period is generally influenced by new business submissions, binding of new business submissions into policies, renewals of existing policies, and average size and premium rate of bound policies.
Current wording
Gross written premium is the amount received, or to be received, for insurance policies written by us during a specific period of time without reduction for premiums ceded to reinsurers. Gross written premium includes direct and assumed premium. The volume of our gross written premium in any given period is generally influenced by new business submissions, binding of new business submissions into policies, renewals of existing policies, and average size and premium rate of bound policies.
Previous wording
We have incurred and expect to continue to incur significant additional general and administrative expense as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and the listing standards of the NYSE and NYSE American, additional corporate, director and officer insurance expenses, greater investor relations expenses and increased legal, audit and consulting fees.
Current wording
We have incurred and expect to continue to incur significant additional general and administrative expense as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and the listing standards of the NYSE, additional corporate, director and officer insurance expenses, greater investor relations expenses and increased legal, audit and consulting fees.
Previous wording
ii)In force placed premium — the annualized premium of in force policies placed with third party insurance companies for which we earn a recurring commission payment. In force placed premium currently reflects approximately 2% of IFP.
Current wording
ii)In force placed premium — the annualized premium of in force policies placed with third party insurance companies for which we earn a recurring commission payment. In force placed premium currently reflects approximately 4% of IFP.
Previous wording
Gross earned premium is the earned portion of our gross written premium. Gross earned premium includes direct and assumed premium. We also began assuming premium related to car insurance policies written in Texas in December 2022, in connection with our fronting arrangement with a third party carrier in Texas.
Current wording
Gross earned premium is the earned portion of our gross written premium. Gross earned premium includes direct and assumed premium. We have assumed premium related to car insurance policies written in Texas in connection with our fronting arrangement with a third party carrier in Texas.
Previous wording
We define adjusted EBITDA, a non-GAAP financial measure, as net loss excluding the impact of income tax expense, depreciation and amortization, stock-based compensation, interest expense, interest income and others, net investment income, change in fair value of warrants liability, amortization of fair value adjustment on insurance contract intangible liability relating to the Metromile Acquisition, and other non-cash adjustments and other transactions that we consider to be unique in nature. See “- Non-GAAP Financial Measures” for a reconciliation of net loss to adjusted EBITDA in accordance with GAAP.
Current wording
We define adjusted EBITDA, a non-GAAP financial measure, as net loss excluding the impact of income tax expense, depreciation and amortization, stock-based compensation, interest expense, interest income and others, net investment income, amortization of fair value adjustment on insurance contract intangible liability relating to the acquisition of Metromile, and other one time and non-cash adjustments and other transactions that we consider to be unique in nature. See “- Non-GAAP Financial Measures” for a reconciliation of net loss to adjusted EBITDA in accordance with GAAP.
Previous wording
Net earned premium increased by$55.4 million, or 18%, to $370.6 millionfor the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to the earning of increased gross written premium and impact of our reinsurance program to ceded written premium under our Proportional Reinsurance Contracts as discussed above under “Reinsurance.”
Current wording
Net earned premium increased by$165.7 million, or 45%, to $536.3 millionfor the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to the earning of increased gross written premium and impact of our new reinsurance program as discussed in more detail in the “Reinsurance” section above.
Previous wording
Gross written premium increased $190.6 million, or 26%, to $929.0 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily due to a 20% increase in net added customers year over year, driven by the success of our digital advertising campaigns and partnerships. We also continued to expand our geographic footprint and product offerings. In addition, we saw a 5% increase in premiums per customer year over year due to an increasing prevalence of multiple policies per customer, growth in the overall average policy value, and continued shift in the mix of underlying products toward higher value policies. Assumed premium related to car insurance policies written in Texas from our fronting arrangement with a third party carrier in Texas also contributed to the increase in gross written premium during the period.
Current wording
Gross written premium increased $242.3 million, or 26%, to $1,171.3 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily due to a 23% increase in net added customers year over year, driven by the success of our digital advertising campaigns and partnerships. We also continued to expand our geographic footprint and product offerings. In addition, we saw a 7% increase in premiums per customer year over year due to an increasing prevalence of multiple policies per customer, growth in the overall average policy value, and continued shift in the mix of underlying products toward higher value policies. Assumed premium related to car insurance policies written in Texas through our fronting arrangement with a third party carrier in Texas also contributed to the increase in gross written premium during the period.
Previous wording
Net written premium increased $65.8 million, or 19%, to $415.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 due to factors noted above.
Current wording
Net written premium increased $348.4 million, or 84%, to $763.5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 due to factors noted above.
Previous wording
The table below shows the amount of premium we earned on a gross and net basis. Ceded earned premium as a percentage of gross earned premium slightly increased to 55% for the year ended December 31, 2024, as compared to 53% for the year ended December 31, 2023 primarily due to the impact of the renewed terms under the proportional reinsurance contracts, as discussed above.
Current wording
The table below shows the amount of premium we earned on a gross and net basis. Ceded earned premium as a percentage of gross earned premium decreased to 49% for the year ended December 31, 2025, as compared to 55% for the year ended December 31, 2024 consistent with our participation rate in our reinsurance contracts as discussed in more detail in the “Reinsurance” section above.
Previous wording
Ceding commission income increased $21.3 million, or 31% to $91.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, consistent with the increase in ceded earned premium related to the proportional reinsurance contracts with third-party reinsurance companies during the year.
Current wording
Ceding commission income increased $31.6 million, or 35% to $122.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, consistent with the increase in ceded earned premium and impact of our variable ceding commission arrangement with reinsurers driven by favorable loss ratio development in comparison to prior year.
Previous wording
Net investment income increased $9.3 million, or 38%, to $34.0 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily driven by the diversification of the Company’s investment portfolio with higher returns in comparison to prior year, offset by investment expenses of $0.3 million. We mainly invest in cash, money market funds, U.S. Treasury bills, corporate debt securities, asset-backed securities, notes and other obligations issued or guaranteed by the U.S. Government and non-US Government.
Current wording
Net investment income increased $3.8 million, or 11%, to $37.8 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily driven by the diversification of the Company’s investment portfolio with higher returns, offset by investment expenses of $0.4 million. We mainly invest in cash, money market funds, U.S. Treasury bills, corporate debt securities, asset-backed securities, notes and other obligations issued or guaranteed by the U.S. governments and non-US governments.
Previous wording
Commission and other income increased $10.7 million, or 53% to $30.8 million for the year ended December 31, 2024 compared to year ended December 31, 2023, primarily due to growth in premiums placed with third-party insurance companies, installment fees and sublease income from our New York and San Francisco office space.
Current wording
Commission and other income increased $10.3 million, or 33% to $41.1 million for the year ended December 31, 2025 compared to year ended December 31, 2024, primarily due to growth in premiums placed with third-party insurance companies, installment fees, interest income and sublease income from our New York and San Francisco office space.
Previous wording
Loss and LAE, net decreased $3.4 million, or 1%, to $277.0 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was in line with growth in premium, increased claim costs and the impact of an extra-contractual car claim liability related to pre-acquisition Metromile, offset by reserve releases due to better than expected loss reserve emergence on homeowners multi-peril and pet lines of business. Net incurred losses in 2024 also included $3.5 million from Hurricane Helene and $4.0 million from Hurricane Beryl.
Current wording
Loss and LAE, net increased $70.0 million, or 25%, to $347.0 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was due to growth in premium offset by reserve releases due to better than expected loss reserve emergence on homeowners multi-peril line of business and car. Net incurred losses included the impact of the California Wildfires in January 2025 in the amount of $19.6 million.
Previous wording
Other insurance expense increased $17.6 million, or 30%, to $76.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 consistent with growth in premium. Professional fees, and other increased by $5.9 million, or 33%, as compared to the year ended December 31, 2023, primarily in support of growth and expansion initiatives. Credit card processing fees increased $4.3 million, or 33%, as a result of the increase in customers and associated premium. Amortization of deferred acquisition costs, net of ceded commissions also increased by $3.8 million, or 38% as compared to the year ended December 31, 2023, consistent with growth in business. Employee-related expense, including stock based compensation, increased by $3.6 million, or 20%, as compared to the year ended December 31, 2023, driven by an increase in underwriting staff to support our continued growth.
Current wording
Other insurance expense increased $16.9 million, or 22%, to $93.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 consistent with growth in premium and the California FAIR Plan assessment charge of $6.9 million related to the January 2025 California Wildfires. Credit card fees increased $6.5 million, or 37%, as a result of the increase in customers and associated premium. Amortization of deferred acquisition costs, net of ceded commissions also increased by $2.8 million, or 20% as compared to the year ended December 31, 2024, consistent with growth in business. Underwriting data costs increased $2.1 million, or 18%, as compared to the year ended December 31, 2024. Insurance regulatory fees decreased $1.7 million, or 31% as compared to the year ended December 31, 2024.
Previous wording
Sales and marketing expense increased$64.4 million, or 63%, to $166.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. Expense related to brand and performance advertising increased by $66.3 million, or 120%, as a result of increased spending on search advertising and other customer acquisition channels. Software costs increased by $1.4 million, or 82% as compared to December 31, 2023. Fees paid to contractors increased by $1.2 million, or 100% as compared to December 31, 2023. Employee-related expense, including stock-based compensation decreased by $3.7 million or 11%, as compared to the year ended December 31, 2023, due to reduced headcount.
Current wording
Sales and marketing expense increased$58.1 million, or 35%, to $224.4 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. Expense related to brand and performance advertising increased by $65.8 million, or 54%, as a result of increased spending on search advertising and other customer acquisition channels. Compensation expense related to the warrant shares decreased $11.7 million, or 180%, as compared to December 31, 2024 due to the termination of the Warrant Agreement with Chewy.
Previous wording
Technology development expense decreased $3.0 million, or 3%, to $85.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. Employee-related expense, including stock based compensation, net of capitalized costs for the development of internal-use software, decreased $1.6 million, or 2%, as compared to the year ended December 31, 2023, driven by decrease in payroll and stock compensation expense for product, engineering, design and quality assurance personnel. Hosting and development costs also decreased $1.0 million, or 11%, as compared to the year ended December 31, 2023.
Current wording
Technology development expense increased $8.1 million, or 9%, to $93.9 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. Employee-related expense, including stock based compensation, net of capitalized costs for the development of internal-use software, increased $9.5 million, or 14%, as compared to the year ended December 31, 2024, driven by increase in headcount and related payroll and stock compensation expense for product, engineering, design and quality assurance personnel. Software expense increase $2.0 million, or 53%, as compared to the year ended December 31, 2024. Hosting and development decreased $1.8 million, or 21%, as compared to the year ended December 31, 2024. Payments made to contractors decreased $1.8 million, or 44%. as compared to the year ended December 31, 2024.
Previous wording
Income tax (benefit) expense decreased $8.8 million, or 124%, from $7.1 million income tax expense for the year ended December 31, 2023 to $1.7 million income tax benefit for the year ended December 31, 2024, due to decrease in the liability for uncertain tax positions due to updated benchmarking analyses in the current year.
Current wording
Income tax expense increased $6.3 million, or 371%, from $1.7 million income tax benefit for the year ended December 31, 2024 to $4.6 million income tax expense for the year ended December 31, 2025, primarily due to a change in uncertain tax positions related to the change in transfer pricing methodology in prior year.
Previous wording
Net loss decreased $34.7 million, or 15%, to $202.2 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 due to the factors described above.
Current wording
Net loss decreased $36.7 million, or 18%, to $165.5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 due to the factors described above.
Previous wording
We define Adjusted EBITDA, a non-GAAP financial measure, as net loss excluding income tax expense, depreciation and amortization, stock-based compensation, interest expense, interest income and others, net investment income, change in fair value of warrants liability, amortization of fair value adjustment on insurance contract intangible liability relating to the Metromile Acquisition, and other non-cash adjustments and other transactions that we would consider to be unique in nature. We exclude these items from Adjusted EBITDA because we do not consider them to be directly attributable to our underlying operating performance. We use Adjusted EBITDA as an internal performance measure in the management of our operations because we believe it gives our management and other customers of our financial information useful insight into our results of operations and our underlying business performance. Adjusted EBITDA should not be viewed as substitute for net loss calculated in accordance with GAAP, and other companies may define adjusted EBITDA differently.
Current wording
We define Adjusted EBITDA, a non-GAAP financial measure, as net loss excluding income tax expense, depreciation and amortization, stock-based compensation, interest expense, interest income and others, net investment income, amortization of fair value adjustment on insurance contract intangible liability relating to the acquisition of Metromile, and other one time and non-cash adjustments and other transactions that we would consider to be unique in nature. We exclude these items from Adjusted EBITDA because we do not consider them to be directly attributable to our underlying operating performance. We use Adjusted EBITDA as an internal performance measure in the management of our operations because we believe it gives our management and other customers of our financial information useful insight into our results of operations and our underlying business performance. Adjusted EBITDA should not be viewed as substitute for net loss calculated in accordance with GAAP, and other companies may define adjusted EBITDA differently.
Previous wording
(3) Includes $3.9 million extra-contractual car claim liability related to pre-acquisition Metromile, and asset impairment charge of $0.3 million related to a portion of the New York office sublease (Note 22), net of gain on termination of lease for the year ended December 31, 2024.
Current wording
(6) Includes $3.9 million extra-contractual car claim liability related to pre-acquisition Metromile (see Note 12 of the consolidated financial statements), and impairment charge of $0.3 million related to a portion of the New York office sublease, net of gain on termination of lease for the year ended December 31, 2024 (See Note 21 of the consolidated financial statements).
Previous wording
As of December 31, 2024, we had $385.7 million in cash and cash equivalents, and $634.9 million in investments. From the date we commenced operations, we have generated negative cash flows from operations, and we have financed our operations primarily through private and public sales of equity securities and third-party financing. Our principal sources of funds are insurance premiums, investment income, reinsurance recoveries and proceeds from maturity and sale of invested assets. These funds are primarily used to pay claims, operating expenses and taxes. In June 2023, we entered into an Agreement with GC, where up to $150.0 million of financing will be provided for our sales and marketing growth efforts through December 31, 2024. The Agreement was amended and restated in January 2024, pursuant to which an additional financing of $140.0 million will be provided for our sales and marketing growth efforts through December 31, 2025, and was further amended and restated in April 2024 and June 2024 to clarify certain provisions and all material terms and conditions remain unchanged. On February 3, 2025, the Agreement was further amended under which GC will provide up to an additional $200 million of financing for our sales and marketing growth efforts from January 1, 2026 to December 31, 2026. As of December 31, 2024, we had $83.4 million of outstanding borrowings under the Amended and Restated Agreement with GC. We believe our existing cash and cash equivalents as of December 31, 2024 will be sufficient to meet our working capital, liquidity and capital expenditure needs over at least the next 12 months. This belief is subject, to a certain extent, on general economic, financial, competitive, regulatory and other factors that are beyond our control.
Current wording
As of December 31, 2025, we had $385.0 million in cash and cash equivalents, and $722.9 million in investments. From the date we commenced operations, we have generated negative cash flows from operations, and we have financed our operations primarily through private and public sales of equity securities and third-party financing. Our principal sources of funds are insurance premiums, investment income, reinsurance recoveries and proceeds from maturity and sale of invested assets. These funds are primarily used to pay claims, operating expenses and taxes. We entered into an Agreement with GC in June 2023, where up to $150 million of financing would be provided for our sales and marketing growth efforts through December 31, 2024. The Agreement was amended and restated in January 2024, pursuant to which an additional financing of $140 million would be provided for our sales and marketing growth efforts through December 31, 2025, and was further amended and restated in April 2024 and June 2024 to clarify certain provisions and all material terms and conditions remain unchanged. On February 3, 2025, the Agreement was further amended under which GC will provide up to an additional $200 million of financing for our sales and marketing growth efforts from January 1, 2026 to December 31, 2026. As of December 31, 2025, we had $158.1 million of outstanding borrowings under the Amended and Restated Agreement with GC. We believe our existing cash and cash equivalents as of December 31, 2025 will be sufficient to meet our working capital, liquidity and capital expenditure needs over at least the next 12 months. This Agreement with GC was further amended and restated in December 2025 to clarify certain provisions with no changes to material terms. This belief is subject, to a certain extent, on general economic, financial, competitive, regulatory and other factors that are beyond our control.
Previous wording
Our U.S. and Dutch insurance company subsidiaries, and our Dutch insurance holding company, are restricted by statute as to the amount of dividends that they may pay without the prior approval of their respective competent regulatory authorities. As of December 31, 2024, cash and investments held by these companies was $593.9 million, of which $271.4 million is held as regulatory surplus.
Current wording
Our U.S. and Dutch insurance company subsidiaries, and our Dutch insurance holding company, are restricted by statute as to the amount of dividends that they may pay without the prior approval of their respective competent regulatory authorities. As of December 31, 2025, cash and investments held by these companies was $773.0 million and statutory surplus amounted to $329.8 million.
Previous wording
Cash used in operating activities was $11.4 million for the year ended December 31, 2024, a decrease of $107.7 million from $119.1 million for the year ended December 31, 2023. This reflected the $34.7 million decrease in our net loss, primarily offset by changes in our operating assets and liabilities. The decrease in cash used in operating activities from year ended December 31, 2024 compared to year ended December 31, 2023 was primarily due to claims payments and settlements with our reinsurance partners, offset by collection of premiums and recoveries from reinsurance partners.
Current wording
Cash used in operating activities was $16.5 million for the year ended December 31, 2025, an increase of $5.1 million from $11.4 million for the year ended December 31, 2024. This reflected the $36.7 million decrease in our net loss, primarily offset by changes in our operating assets and liabilities. The increase in cash used in operating activities from year ended December 31, 2025 compared to year ended December 31, 2024 was primarily due to claims payments and settlements with our reinsurance partners, offset by collection of premiums and recoveries from reinsurance partners.
Previous wording
Cash used in operating activities was $119.1 million for the year ended December 31, 2023, a decrease of $43.9 million from $163.0 million for the year ended December 31, 2022. This reflected the $60.9 million decrease in our net loss, primarily offset by changes in our operating assets and liabilities. The decrease in cash used in operating activities from the year ended December 31, 2023 compared to December 31, 2022 was primarily due to claims payments, settlements with our reinsurance partners, and decreased spend related to growth and expansion, offset by collection of premiums and recoveries from reinsurance partners.
Current wording
Cash used in operating activities was $11.4 million for the year ended December 31, 2024, a decrease of $107.7 million from $119.1 million for the year ended December 31, 2023. This reflected the $34.7 million decrease in our net loss, primarily offset by changes in our operating assets and liabilities. The decrease in cash used in operating activities from the year ended December 31, 2024 compared to December 31, 2023 was primarily due to claims payments, settlements with our reinsurance partners, and decreased spend related to growth and expansion, offset by collection of premiums and recoveries from reinsurance partners.
Previous wording
Cash provided by investing activities was $88.7 million for the year ended December 31, 2023 primarily due to proceeds from sales and maturities of U.S. government obligations, corporate debt securities, asset-backed securities, short term investments, offset by purchases of U.S. government obligations, corporate debt securities, asset-backed securities, short term investments. We also purchased property and equipment purchased during the year.
Current wording
Cash used in investing activities was $89.1 million for the year ended December 31, 2025 primarily due to purchases of U.S. and non-US government obligations, corporate debt securities, asset-backed securities, short term investments offset by proceeds from sales and maturities of U.S. and non-US government obligations, corporate debt securities, asset-backed securities, short term investments. We also purchased property and equipment during the year.
Previous wording
Cash provided by investing activities was $40.6 million for the year ended December 31, 2024 primarily due to proceeds from sales and maturities of U.S. and non-US government obligations, corporate debt securities, asset-backed securities, short term investments, offset by purchases of U.S. and non-US government obligations, corporate debt securities, asset-backed securities, short term investments. We also purchased property and equipment during the year.
Current wording
Cash provided by investing activities was $40.6 million for the year ended December 31, 2024 primarily due to proceeds from sales and maturities of U.S. government obligations, corporate debt securities, asset-backed securities, short term investments, offset by purchases of U.S. and non-US government obligations, corporate debt securities, asset-backed securities, short term investments. We also purchased property and equipment purchased during the year.
Previous wording
Cash provided by financing activities was $87.7 million for the year ended December 31, 2024 primarily due to borrowings under the Amended and Restated Agreement with GC and proceeds from stock exercises.
Current wording
Cash provided by financing activities was $106.6 million for the year ended December 31, 2025 primarily due to borrowings under the Amended and Restated Agreement with GC and proceeds from stock exercises.
Previous wording
Cash provided by financing activities was $15.4 million for the year ended December 31, 2023 primarily due to borrowings under the financing agreement and proceeds from stock exercises.
Current wording
Cash provided by financing activities was $87.7 million for the year ended December 31, 2024 primarily due to borrowings under the financing agreement and proceeds from stock exercises.
Previous wording
We do not have any current plans for material capital expenditures other than current operating requirements. We currently have a financing agreement with GC, the Amended and Restated Agreement with GC (see “Note 14 - Borrowings under financing agreement”). To the extent our future operating cash flows are insufficient to cover our net losses from catastrophic events, we had $1,010.9 million in cash and cash equivalents, and investments available at December 31, 2024. We may also seek to raise additional capital through third-party borrowings, sales of our equity, issuance of debt securities or entrance into new reinsurance arrangements. There can be no assurance that we will be able to raise additional capital on favorable terms or at all.
Current wording
We do not have any current plans for material capital expenditures other than current operating requirements. We currently have a financing agreement with GC, the Amended and Restated Agreement with GC (see “Note 13 - Borrowings under financing agreement”). To the extent our future operating cash flows are insufficient to cover our net losses from catastrophic events, we had$1,026.4 million in cash and cash equivalents, and investments available at December 31, 2025. We may also seek to raise additional capital through third-party borrowings, sales of our equity, issuance of debt securities or entrance into new reinsurance arrangements. There can be no assurance that we will be able to raise additional capital on favorable terms or at all.
Previous wording
We also have the ability to access additional capital through pursuing third-party borrowings, sales of our equity, issuance of debt securities or entrance into new reinsurance arrangements. There can be no assurance that we will be able to raise additional capital on favorable terms or at all.
Current wording
We also have the ability to access additional capital through third-party borrowings, sales of our equity, issuance of debt securities or entrance into new reinsurance arrangements. There can be no assurance that we will be able to raise additional capital on favorable terms or at all.
Showing the first 40 of 41 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
LIC entered into an Automatic Facultative PPR Contract with Arch Reinsurance, which was effective July 1, 2023 and expired on June 30, 2024. The Automatic Facultative PPR Contract, in which claims in excess of $3,000,000 were 100% ceded with a potential recovery of at least $10,000,000, subject to certain limitations, which expired on June 30, 2024, and was not renewed.