https://www.youtube.com/watch?v=dxPT4qm0xUQ
Not many interviews with Daniel can be found after the Q4 release. Awesome stuff, California fires and NPS. The amount of automation in insurance sales.
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Growth continues! The market is taking the result quite calmly.
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Growth is not a problem for any insurance company. In fact, it’s probably one of the least interesting things when discussing them, or at least from an investment perspective.
It’s more essential to consider whether the risk can be priced correctly. I will follow with interest how things progress with this company.
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Root can even make a profit through growth.
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Here’s a pretty interesting tweet thread about Lemonade. 
https://x.com/MMMTwealth/status/1929531174549860551
Rest of the tweet thread
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I remembered this comment now that Lemonade reported on reducing its reinsurance to 20%. This was, however, reduced voluntarily. Time will tell if it was a good move. The stock has been performing strongly lately.
Additionally, car insurance expanded to Indiana, Shai commented on the matter on X.
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It remains the most elusive insurance company of all time, whose reported figures make no sense. Those reported figures relate to the holding company (cons) - so it’s difficult to know what the solvency situation of those insurance companies is (186% for the European company in 2024 - otherwise it’s quite difficult to find out; with JV QS dropping to 20%, we are closer to 100%). Apparently, however, reinsurance (JV) first goes from the risk units to the Cayman Islands. If the holding company has cash, the JV share can naturally be reduced by capitalization, but in the usual fashion, no figures describing solvency are disclosed to the market.
Again - hands off the stock.
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Here are the “unbiased” figures. Insurance business is very sluggish.
Edit: also added the impact of the JV change (“about” impact on 2024 figures. In addition to this, the capital requirement increases (i.e., less free cash) + naturally, new commission levels are not mentioned at all).
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Report is out, call starts at three.
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There’s still a lot to do…
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The journey is long, but you just have to enjoy this ride and stock up on cheap shares along the way.
This was indeed a great quarter once again, things are progressing according to the script.
Over 30% of the float sold short, that probably tells something… but the ride can indeed be quite volatile (and deviate from fundamentals) going forward.
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LMND and ROOT’s stock reactions to Q2 results were opposite. LMND +33% and ROOT -28% considering the last week.
I must admit that I’ve familiarized myself with Root a bit lazily. I should delve into it a bit more and consider a small position.
Additionally, in the insurance field, Oscar Health (OSCR) is an interesting company that has recently gained hype. The hype somewhat deflated due to OBBB when the stock significantly retreated.
LMND, ROOT, and OSCR are all examples of why the insurance industry is ripe for disruption.
While LMND handles claims and sales with AI. This week, I queued at the customer service of a domestic legacy operator for something as trivial as a lost e-invoice… Undoubtedly, the financial figures of said company look better for now.
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PB anticipates positive EBITDA already by the end of the year in a new video.
In itself, that wouldn’t be surprising, as LMND typically exceeds expectations.
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PB followed up with a correction. The one-time $11M tax credit was erroneously included in the calculations.
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The bears’ opinion is slowly changing. Short levels, however, remain around 30%, where they have been for a long time.
https://x.com/alc2022/status/1968714128106668339?s=46&t=WEG-cVPSomkRhXnGNjpFZw
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The tweet reminds us that while a low loss ratio is often seen as positive, it alone certainly does not determine a company’s success. A too low level can limit growth because it leaves profitable risks unexploited and can even raise regulators’ suspicions of overpricing.
According to the tweet, balance is key: too high a loss ratio eats into cash, too low slows growth and erodes trust. The best way, it is said, is to find an appropriate level that supports scalability, customer satisfaction, and a stable gross margin.
For $LMND, the optimal path is not chasing the lowest possible loss ratio, but finding the sweet spot that balances scale, growth, unit economics, ADR/churn, customer satisfaction, margins, and ultimately, gross profit.
https://x.com/ValerijDaniloff/status/1972403294740857067
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I came across an old rebellionaire video on X, where a guy from General Catalyst explains well why customer acquisition cost (CAC) is a very profitable investment when the customer lifetime value (LTV) is right.
On X, Lemonade is undoubtedly hyped and praised a lot, and for good reason! It was also noted there that LMND holdings are growing in the Nordics.
Big names are joining the team to disrupt insurances!
I had already thought that LMND is enough in my portfolio, but now with Q3 approaching, I’m wondering if I should add a bit more after all, since those short interest figures are so tempting?
About shorts https://youtu.be/GUNPplU7L14?si=dEbp9pmyojhX048H