LoginSignup
image de profil
BamBamInvest
@BamBamInvest
1J·

Lemonade Potential 🚀- Disruption in the insurance industry ? Brief company presentation

$LMND (+4,73 %)

attachment


History:


$LMND (+4,73 %) is an insurance company that was founded as a public benefit corporation and has its headquarters in New York and its European branch in Amsterdam. Lemonade has been traded as a public company on the New York Stock Exchange since July 2020.


$LMND (+4,73 %) Insurance was founded in 2015 by Daniel Schreiber and Shai Wininger with the goal of revolutionizing the insurance industry through technology. The company started by providing home insurance and relies heavily on artificial intelligence and chatbots for claims processing and customer service.


$LMND (+4,73 %) has experienced rapid expansion, including an IPO in 2020 and expansion into Germany


business model:


Lemonade, Inc. offers renters, homeowners, auto, pet and life insurance.


Current market capitalization 3 billion


The company's full-stack, artificial intelligence-powered insurance carriers in the United States and European Union replace brokers and bureaucracy with bots and machine learning. The company's digital substrate enables it to integrate marketing and onboarding with underwriting and claims processing, and to collect and utilize data.


Its technology includes Data Advantage,

AI Maya, AI Jim, CX.AI, Forensic Graph, Blender and Cooper.


AI Maya, the onboarding and customer experience bot, uses natural language to assist customers in the onboarding process.


AI Jim, the claims reporting bot, receives the customer's first claim and pays the claimant or rejects the claim without human intervention.


The company offers pet insurance policies that cover diagnoses, procedures, medication, accidents or illnesses. Even the basic pet insurance covers blood tests, urinalysis, laboratory tests and CT scans.


What is the Lemonade $LMND (+4,73 %)
Giveback?


Giveback is at the heart of Lemonade. This core element of the business model enables customers to use their Lemonade insurance policies to support causes that are close to their hearts.


Since 2017, Lemonade has $LMND (+4,73 %) donated over 10 million US dollars to help build new homes, provide clean water, improve education, promote animal rights and much more.


Here's how it works:


When a customer purchases a $LMND (+4,73 %) renters, homeowners, auto or pet insurance, charges a flat fee to cover $LMND (+4,73 %) a flat fee to support and grow the business. A portion of the premiums goes towards claims settlement and the balance goes directly to one of their Giveback Partners - non-profit organizations selected by our customers.


$LMND (+4,73 %) is a non-profit corporation:


$LMND (+4,73 %) is a Public Benefit Corporation and a certified B Corp, which means they are legally committed to making a positive social impact. B Corp certification is awarded to companies that demonstrate that they balance profit and purpose while putting people and the planet at the center.


Every three years, they undergo a comprehensive assessment of their entire organization.


Number of employees: 1 258 (end of 2024)

attachment

Profitability:


$LMND (+4,73 %) Approaching a turning point, possibly offering a promising investment opportunity.


Profitability increases with size, as costs do not rise due to additional premiums, as is normally the case with conventional insurance companies.


Management expects EBITDA profitability in 2026 and net profit profitability in 2027.

They see an extremely clear path to profitability:


They also have a clear path to profitability :


- Loss ratio from 92% to 73

- Net profit margin -123% to -20.2%

- Continued increase in sales growth rates

attachment
attachment

Growth:


Growth is currently still controlled, but the real growth is yet to come, with sales growth rates continuing to rise in the last two quarters.


They have been able to achieve these growth rates without an expansive expansion (both in existing and additional potential states) of automobile insurance, which represents a huge opportunity for $LMND (+4,73 %) represents a huge opportunity.


Car insurance


$LMND (+4,73 %) currently has around 2.3 million customers who use renters, pet and other insurance products. These customers use $LMND (+4,73 %) for one reason: favorable price and convenience.


The share of car insurance is currently still very small and has a lot of room for expansion, so if we were to assume that only 30% of them become car insurance customers with an average annual turnover of USD 1,800, that would be an additional USD 1.24 billion in turnover per year ... just by cross-selling 30% (without any other new customers)


Pet insurance:


The pet insurance market was a $5 billion market in the US last year. It is expected to reach 6 billion dollars in 2025 and 15.7 billion dollars by 2030, growing by 22% annually.


$LMND (+4,73 %) - Total annual premiums recently surpassed the $1 billion mark. So if you were to capture 50% of the pet insurance market, premiums would increase eightfold in just five years (800% assuming the projected growth above)


Trupanion (green line) has a 25% market share today. $LMND (blue line) is around 5%.


However, the search trend will continue to have a positive effect for $LMND (+4,73 %) especially as it is only just beginning to expand further into all states. (This also applies to the other insurance segments)

attachment

Opportunities/long-term potential:


I think the future possibilities and opportunities for $LMND (+4,73 %) a supposedly boring industry are enormous.


The insurance market has one of the largest TAMs of all.


The global insurance market was worth around USD 8 trillion in 2024. The USA and China are the largest insurance markets worldwide, with the USA leading the way with a market share of around 45% and China with around 10%.


  • Slight international expansion (online)
  • Product expansion (additional lines)
  • Enormous cross-selling potential
  • Decreasing dependence on reinsurance
  • Simple and fast premium calculation, conclusion and claims settlement (through AI)
  • Already tested/calculated in-house: https://www.lemonade.com
  • 10-fold sales opportunity


attachment



attachment




$ALV (+0,71 %)
$MUV2 (+1,81 %) , $HNR1 (+0,37 %) , $PGR (-0,61 %) , $GEC , $ALL (+0,26 %) , $AIG (+1,23 %) , $UNH (-2,07 %) , $CVS (+0,24 %) , $UQA (-1,18 %) , $G (-0,7 %) , $VIG (-0,64 %)

29
22 Commentaires
image de profil
Chris@1Chrischi1
1J
great article!
very interesting and never heard of it before.

are you getting in yourself?
have you already determined a fair price with an opportunity to buy?

LG
•
3
•
image de profil
BamBamInvest@BamBamInvest
1J
@1Chrischi1 thanks 😊 yes, I already have some fomo 😂. Wanted to get in before the last 20% and now hoping for a red Monday due to the conflict. Would definitely like to have a foot in, but the share has shown strength in the last 2 weeks. However, as they are not yet profitable, we may get slightly better entry prices with more volatility. But over the next 5-10 years, I don't think that will matter either. ✌️😁
•
6
•
image de profil
Chris@1Chrischi1
1J
@BamBamInvest thanks for your assessment 🫶🏽
•
1
•
image de profil
BamBamInvest@BamBamInvest
1J
@1Chrischi1 If I like a company very much and I don't see too much hype or too high a valuation, I usually buy straight away. However, the market is not necessarily cheap at the moment and I am almost fully invested except for 10%, so I am not under any immediate time pressure. I would buy a small tranche here and then further setbacks, especially as we were already quite overbought in the RSI before Friday at $LMND. Now we are back at 67, just below 70. In case of panic or uncertainty, it can quickly go down 10%, I'm waiting for that 😊 but we'll see if that happens on Monday / next week
•
2
•
image de profil
Chris@Multibagger
1J
As always, a very informative and great contribution from you. Like you, I'm also waiting for the right start
•
1
•
image de profil
BamBamInvest@BamBamInvest
1J
@Multibagger thank you ! if it weren't for the conflict, we would probably just keep on running and only see a short setback to let out a bit of appetite. The share has also shown impressive strength over the last 2 weeks. Let's see what happens, I will probably go in here in 3 tranches, as sentiment can always turn quickly here. Do you have a fixed price for when you want to get in or do you decide on instinct? Chart-wise, it's difficult at the moment with $LMND when there's a lot of momentum, it can turn very quickly.
•
1
•
image de profil
Chris@Multibagger
1J
@BamBamInvest I don't have one. I make decisions based on my gut feeling and the cash situation. My portfolio is still relatively small, even if it has performed well.
•
1
•
image de profil
Chris@Multibagger
1J
@BamBamInvest I have now looked at your question about the entry level again. I think you can put your first foot in the door at €29/30. Of course, €25 would be even better, but I don't think we'll see that any time soon, given the strength it's showing.
•
1
•
image de profil
BamBamInvest@BamBamInvest
1J
@Multibagger also wanted to get in at €30, but I'm not sure if that will be picked up, if the conflict intensifies, then very likely, if not it can turn around quickly. If we see a -10% moment like a few weeks ago, I would get in immediately, but then it would have to be very panicky on Monday. I will also decide spontaneously. I also see the 25 euro mark as very unlikely in the short term, as it would have to escalate properly now or get very bad economic data and signs of inflation. Remains exciting
••
image de profil
BamBamInvest@BamBamInvest
13H
@Multibagger I think you need to write a mega short report and push the price down! Would you do that quickly ? 😁
•
1
•
Wravo@Wravo
1J
I find the company very exciting. The only question I have is about climate change and environmental catastrophes. Many insurers, particularly in the home insurance sector, are increasingly withdrawing from certain US states because the insurance business is no longer profitable in view of the increasing risks. Often they are not legally allowed to adjust premiums fast enough to compensate for the growing losses. For this reason, I did not delve further into the analysis and instead opted for Oscar Health in the Insurance Tech segment. How do you assess this risk?
•
1
•
image de profil
BamBamInvest@BamBamInvest
1J
@Wravo This is certainly an issue, but I believe that they have good risk management, especially as they are only active in a few states so far and are only expanding very slowly. You think very carefully about which lines of business you offer in which state. And most insurers have this risk and have been able to factor it in very well so far. The AI is constantly being trained; if I have read correctly, they have a waiting list of 700,000 people in the motor vehicle sector alone and only want to roll out this line in all states by the end of 2026. They had strong headwinds after Corona and due to the higher inflation, which also caused service costs, car repairs etc. to rise very sharply, which put pressure on the margin (they had not expected this) and also made an acquisition in the automotive sector. I am very confident here and as they are still growing strongly, they can avoid some of these risks.
••
Wravo@Wravo
1J
@BamBamInvest Ah okay, I didn't realize they weren't active nationwide yet, if they had to pull out of a state that would put a big dent in investor sentiment, then this thing is definitely going back on the watchlist, thanks for your work :)
•
1
•
image de profil
BamBamInvest@BamBamInvest
1J
@Wravo very much so, if they can continue to scale it and roll it out in all states, as well as include other divisions, they could become really big and generate much better margins than their competitors. The automotive business is also much more profitable in the U.S. than in Austria/Germany. Customer satisfaction is also really high and well rated, claims are sometimes processed by the AI in a minute and the amount is transferred immediately. I'm really excited to see how things continue here, I really like what I've seen so far ✌️
•
1
•
image de profil
BamBamInvest@BamBamInvest
1J
@Wravo I see you're invested in a similar way to me 😁, I actually have $OSCR on my radar, but from an Austrian perspective it's not so easy to invest in U.S. stocks with the choice of brokers ( $OSCR unfortunately not yet listed in Europe), especially if you want a tax-simple broker. Flatex does that, the order fees are a bit higher, which wouldn't bother me that much, but the exchange rate and spreads are a bit too opaque, as the prices are usually displayed with a 15 minute delay. Anyway, it's already on my main watchlist, as is $KSPI 😁
••
image de profil
BamBamInvest@BamBamInvest
1J
@Wravo I think the Kazakh tange has devalued extremely against the euro, which means additional headwinds for $KSPI. In addition to the supposedly favorable valuation and exciting expansion into Turkey, the only drawback here is probably that it is a company from Kazakhstan 😁 otherwise very exciting, has also lost well, I am also thinking about it. What is your next course of action here?
••
Wravo@Wravo
1J
@BamBamInvest Yes, growth and a price rollercoaster, we all love that 😅😂 I've had the same problem: I paid around 3-4% in fees when I built up a position with ING, and of course there are costs again when I sell. 🫣However, I still had to strike at the valuation.
Oscar is both the price leader and the leader in user experience. The only major risk I see is the repeal of Obamacare. However, if there's one thing we've learned in recent years, it's that family and loyalty are top priorities for Trump. Co-founder Joshua Kushner is the brother of Jared Kushner, Trump's son-in-law. In addition, repealing Obamacare will probably not be Trump's priority in the first two years. After the midterms, he will hardly be able to push it through anyway. I also strongly expect a Democrat to take office again in 2028.

Although this political risk is real, in my opinion it in no way justifies this steep valuation discount.
•
1
•
Wravo@Wravo
1J
@BamBamInvest I find Kazpi really exciting, the management is awesome and I love the concept of a super app. $GRAB was also in my portfolio for a long time. To be honest, though, I probably spend far too much time on the company itself and far too little on the Kazakh economy. 🫣With such a monopoly position, you should actually do that.
In the end, I look at the growth every quarter and deduct the current inflation. As long as this figure remains positive, I'm relaxed about the current valuation for the time being. I also use BIT Capital as an indicator (if you don't know them yet, I think their reports are a must for our strategy) Kazpi is one of their biggest positions.
Of course, that alone is not enough to justify a full position. That's why I'm slowly building up the share via savings plans and observing how the expansion outside Kazakhstan is going. Will the Turkish lira get any better? Let's see. 😬😅But overall, I don't think Kazpi is a bad diversification opportunity at the moment. It's rare to find such a large company that is completely independent of Donald Trump's machinations.
••
image de profil
BamBamInvest@BamBamInvest
19H
@Wravo thanks for the additional information, yes at $KSPI the valuation has been low for a long time and not without reason, people are just cautious about Kazakhstan, that probably won't change so quickly either, I'm curious to see how things will continue here. 👍 decent costs of 3-4 % 😂 it's still cheap for me. I'll wait and see, at some point they'll be listed here in Europe too.
••
image de profil
BamBamInvest@BamBamInvest
18H
@Wravo Yes, currency fluctuations, political uncertainty and the economy are a real issue. I also like the concept of the super app, like $KSPI, $700 and hopefully $SOFI at some point in the financial sector. Yes, of course I know Bit Kapital, I recently came across it through a YouTube video and saw that the position is similar to mine 😂. However, I can't quite understand $HFG, $CVNA and $AG1. I don't really like the automotive sector, I don't think you need to be invested in it and the margins are really bad in the delivery service. I'd rather take $UBER and probably combine all sectors at once in the future 😁. But yes, it's also worth browsing there when selecting companies. $DLO $DUOL is also exciting but has already performed very well and is usually only tradable in the US.
••
Test@equity_expert_599
9H
Great contribution and presentation! This is my first investment in a company that is still making a loss, but I think the story is coherent. Above all, the fact that the number of FTEs has remained the same over the last few years with sales growth shows that the company's AI ideas are coherent, unless external staff have been hired instead. Bought a few shares this morning 🎉
•
1
•
image de profil
BamBamInvest@BamBamInvest
8H
@equity_expert_599 congratulations, I was hoping for a red day and didn't buy. But my chance is yet to come, we are already in the overbought zone again, but that doesn't matter in the long term 👍
•
1
•
Participez à la conversation
S'inscrireConnexion