LEMONADE, INC., 10-Q filed on 5/5/2023
Quarterly Report
v3.23.1
Cover - shares
 3 Months Ended
Mar. 31, 2023
May 04, 2023
Entity Listings [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2023  
Document Transition Report false  
Entity File Number 001-39367  
Entity Registrant Name Lemonade, Inc.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 32-0469673  
Entity Address, Address Line One 5 Crosby Street, 3rd Floor  
Entity Address, City or Town New York  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 10013  
City Area Code 844  
Local Phone Number 733-8666  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   69,490,739
Amendment Flag false  
Entity Central Index Key 0001691421  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus Q1  
Common Stock    
Entity Listings [Line Items]    
Title of 12(b) Security Common Stock, $0.00001 par value per share  
Trading Symbol LMND  
Security Exchange Name NYSE  
Warrant    
Entity Listings [Line Items]    
Title of 12(b) Security Warrants to Purchase Common Stock  
Trading Symbol LMND.WS  
Security Exchange Name NYSE  
v3.23.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Mar. 31, 2023
Dec. 31, 2022
Investments    
Fixed maturities available-for-sale, at fair value (amortized cost: $665.7 million and $673.5 million as of March 31, 2023 and December 31, 2022, respectively) $ 648.5 $ 650.3
Short-term investments (cost: $89.5 million and $99.9 million as of March 31, 2023 and December 31, 2022, respectively) 89.4 99.8
Total investments 737.9 750.1
Cash, cash equivalents and restricted cash 254.8 286.5
Premium receivable, net of allowance for credit losses of $2.7 million and $2.7 million as of March 31, 2023 and December 31, 2022, respectively 185.0 179.6
Reinsurance recoverable 153.7 156.8
Prepaid reinsurance premium 159.8 164.5
Deferred acquisition costs 6.9 6.9
Property and equipment, net 19.8 19.6
Intangible assets 29.8 32.5
Goodwill 19.0 19.0
Other assets 74.5 75.2
Total assets 1,641.2 1,690.7
Liabilities and Stockholders' Equity    
Unpaid loss and loss adjustment expense 245.2 256.2
Unearned premium 297.8 288.0
Trade payables 1.9 1.1
Funds held for reinsurance treaties 129.1 136.0
Deferred ceding commission 39.5 39.7
Ceded premium payable 20.9 18.4
Other liabilities and accrued expenses 85.0 84.5
Total liabilities 819.4 823.9
Contingencies (Note 15)
Stockholders' equity    
Common stock, $0.00001 par value, 200,000,000 shares authorized; 69,449,348 and 69,275,030 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively 0.0 0.0
Additional paid-in capital 1,769.6 1,754.1
Accumulated deficit (925.5) (859.7)
Accumulated other comprehensive loss (22.3) (27.6)
Total stockholders' equity 821.8 866.8
Total liabilities and stockholders' equity $ 1,641.2 $ 1,690.7
v3.23.1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Millions
Mar. 31, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Fixed maturities available-for-sale, amortized cost $ 665.7 $ 673.5
Short -term investments, cost 89.5 99.9
Premium receivable, allowance for doubtful accounts $ 2.7 $ 2.7
Common stock, par value (usd per share) $ 0.00001 $ 0.00001
Common stock, authorized (in shares) 200,000,000 200,000,000
Common stock, issued (in shares) 69,449,348 69,275,030
Common stock, outstanding (in shares) 69,449,348 69,275,030
v3.23.1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Revenue    
Net earned premium $ 68.2 $ 27.4
Ceding commission income 17.2 14.0
Net investment income 5.0 0.9
Commission and other income 4.8 2.0
Total revenue 95.2 44.3
Expense    
Loss and loss adjustment expense, net 63.6 24.4
Other insurance expense 13.6 9.1
Sales and marketing 28.2 38.3
Technology development 21.8 16.9
General and administrative 32.7 28.2
Total expense 159.9 116.9
Loss before income taxes (64.7) (72.6)
Income tax expense 1.1 2.2
Net loss (65.8) (74.8)
Other comprehensive loss, net of tax    
Unrealized gain (loss) on investments in fixed maturities 6.0 (14.3)
Foreign currency translation adjustment (0.7) (1.1)
Comprehensive loss $ (60.5) $ (90.2)
Per share data:    
Net loss per share attributable to common stockholders—basic (usd per share) $ (0.95) $ (1.21)
Net loss per share attributable to common stockholders—diluted (usd per share) $ (0.95) $ (1.21)
Weighted average common shares outstanding—basic (in shares) 69,334,103 61,698,568
Weighted average common shares outstanding—diluted (in shares) 69,334,103 61,698,568
v3.23.1
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($)
$ in Millions
Total
Common Stock
Additional Paid-In Capital
Accumulated Deficit
Accumulated Other Comprehensive (Loss) Income
Beginning balance (in shares) at Dec. 31, 2021   61,660,996      
Beginning balance at Dec. 31, 2021 $ 988.2 $ 0.0 $ 1,553.5 $ (561.9) $ (3.4)
Increase (Decrease) in Stockholders' Deficit [Roll Forward]          
Exercise of stock options and distribution of restricted stock units (in shares)   97,743      
Exercise of stock options and distribution of restricted stock units 0.6   0.6    
Stock-based compensation 14.1   14.1    
Net loss (74.8)     (74.8)  
Other comprehensive income (loss) (15.4)       (15.4)
Ending balance (in shares) at Mar. 31, 2022   61,758,739      
Ending balance at Mar. 31, 2022 $ 912.7 $ 0.0 1,568.2 (636.7) (18.8)
Beginning balance (in shares) at Dec. 31, 2022 69,275,030 69,275,030      
Beginning balance at Dec. 31, 2022 $ 866.8 $ 0.0 1,754.1 (859.7) (27.6)
Increase (Decrease) in Stockholders' Deficit [Roll Forward]          
Exercise of stock options and distribution of restricted stock units (in shares)   174,318      
Exercise of stock options and distribution of restricted stock units 0.1   0.1    
Stock-based compensation 15.4   15.4    
Net loss (65.8)     (65.8)  
Other comprehensive income (loss) $ 5.3       5.3
Ending balance (in shares) at Mar. 31, 2023 69,449,348 69,449,348      
Ending balance at Mar. 31, 2023 $ 821.8 $ 0.0 $ 1,769.6 $ (925.5) $ (22.3)
v3.23.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Cash flows from operating activities:    
Net loss $ (65.8) $ (74.8)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 5.1 1.5
Stock-based compensation 15.4 14.1
Amortization of discount on bonds 0.2 2.5
Provision for bad debt 2.3 2.0
Changes in operating assets and liabilities:    
Premium receivable (7.7) (10.6)
Reinsurance recoverable 3.1 (22.7)
Prepaid reinsurance premium 4.7 (7.1)
Deferred acquisition costs 0.0 (0.5)
Other assets 0.7 (4.2)
Unpaid loss and loss adjustment expense (11.0) 9.7
Unearned premium 9.8 14.7
Trade payables 0.8 1.6
Funds held for reinsurance treaties (6.9) 5.1
Deferred ceding commissions (0.2) 2.3
Ceded premium payable 2.5 16.1
Other liabilities and accrued expenses 0.6 10.8
Net cash used in operating activities (46.4) (39.5)
Cash flows from investing activities:    
Proceeds from short-term investments sold or matured 36.6 44.7
Proceeds from bonds sold or matured 106.9 9.2
Cost of short-term investments acquired (23.2) (17.9)
Cost of bonds acquired (102.3) (29.1)
Purchases of property and equipment (2.7) (2.8)
Net cash provided by investing activities 15.3 4.1
Cash flows from financing activities:    
Proceeds from stock exercises 0.1 0.6
Net cash provided by financing activities 0.1 0.6
Effect of exchange rate changes on cash, cash equivalents and restricted cash (0.7) (0.8)
Net decrease in cash, cash equivalents and restricted cash (31.7) (35.6)
Cash, cash equivalents and restricted cash at beginning of period 286.5 270.6
Cash, cash equivalents and restricted cash at end of period 254.8 235.0
Supplemental disclosure of cash flow information:    
Cash paid for income taxes $ 0.2 $ 1.1
v3.23.1
Nature of the Business
 3 Months Ended
Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of the Business Nature of the BusinessLemonade, Inc. is a public benefit corporation organized under Delaware law on June 17, 2015. It provides certain personnel, facilities and services to each of its subsidiaries (together with Lemonade, Inc., the “Company”), all of which are 100% owned, directly or indirectly, by Lemonade, Inc. For the list of the Company's US and EU subsidiaries, see Note 1 - Nature of the Business, of the audited consolidated financial statements and related notes thereto for the year ended December 31, 2022 as included in the Company's Annual Report on Form 10-K (the "Annual Report on Form 10-K") for more complete descriptions and discussions.
v3.23.1
Basis of Presentation
 3 Months Ended
Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation Basis of Presentation
The accompanying interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated upon consolidation. All foreign currency amounts in the condensed consolidated statement of operations and comprehensive loss have been translated using an average rate for the reporting period. All foreign currency balances in the balance sheet have been translated using the spot rate at the end of the reporting period. All figures expressed, except share amounts, are in U.S. dollars in millions.
Risk and Uncertainties
The COVID-19 pandemic has caused national and global economic and financial market disruptions and may adversely impact the Company. Although the Company did not see a material impact on its results of operations for the three months ended March 31, 2023 and year ended December 31, 2022 due to the COVID-19 pandemic, the Company cannot predict the duration or magnitude of the pandemic or the full impact that it may have on the Company’s financial condition and results of operations, business operations, and workforce.
Unaudited interim financial information
In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of its financial position and its results of operations, changes in stockholders’ equity and cash flows. The condensed consolidated balance sheet at December 31, 2022 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the fiscal year ended December 31, 2022 as included in the Company’s Annual Report on Form 10-K
v3.23.1
Use of Estimates
 3 Months Ended
Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Use of Estimates Use of EstimatesThe preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates estimates, including those related to contingent assets and liabilities as of the date of the consolidated financial statements as well as the reported amounts of revenue and expense during the reporting period. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities at the dates of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Significant estimates reflected in the Company’s condensed consolidated financial statements include, but are not limited to, reserves for loss and loss adjustment expense, reinsurance recoverables on unpaid losses, intangible assets, valuation allowance on deferred tax assets and the valuation of stock-based compensation prior to the Company’s Initial Public Offering (the “IPO”)
v3.23.1
Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2023
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Cash, cash equivalents and restricted cash
The following represents the Company’s cash, cash equivalents and restricted cash as of March 31, 2023 and December 31, 2022:
March 31,December 31,
20232022
Cash and cash equivalents$250.1 $282.5 
Restricted cash4.7 4.0 
Total cash, cash equivalents and restricted cash$254.8 $286.5 
Cash and cash equivalents consist primarily of bank deposits and money market accounts with maturities of three months or less at the date of acquisition and are stated at cost, which approximates fair value. The Company’s restricted cash primarily relates to security deposits for certain office leases. The Company also collects insurance policy premiums that it holds in a segregated cash account for transmittal to the underwriting carrier, or settlement of insurance related claims. The carrying value of restricted cash approximates fair value.
New Accounting Pronouncements
There are no new accounting standards not yet implemented that are expected to have a material effect on the Company's consolidated financial position or results of operations.
v3.23.1
Acquisition of Metromile
 3 Months Ended
Mar. 31, 2023
Business Combination and Asset Acquisition [Abstract]  
Acquisition of Metromile Acquisition of Metromile
On July 28, 2022 (the "Acquisition Date"), the Company completed its acquisition of Metromile, Inc. (“Metromile"), a leading digital insurance platform in the United States that offers real-time, personalized auto insurance policies by the mile (the "Metromile Acquisition"). The Company acquired 100% of Metromile's equity through an all-stock transaction based upon the exchange ratio of 0.05263 shares of Lemonade for each outstanding share of Metromile. As a result of the acquisition, Metromile stockholders received 6,901,934 shares of Lemonade's common stock, with minimal cash paid in lieu of fractional shares. In addition, upon closing of the Metromile Acquisition, the Company assumed all outstanding and unexercised options, and outstanding restricted stock units (collectively referred to as "replacement awards") as of the Acquisition Date, which were converted into corresponding awards using the same exchange ratio of 0.05263 and with substantially identical terms and conditions prior to the close of the Metromile Acquisition.

Fair value of consideration transferred for the Metromile Acquisition is as follows ($ in millions):

Metromile issued and outstanding stock exchanged for Lemonade common stock (1)
$136.9 
Contingent consideration (2)
— 
Metromile vested awards exchanged for Lemonade awards (3)
0.8 
Total Purchase Consideration$137.7 

(1)    The fair value of 6,901,934 shares issued and exchanged for Lemonade common stock was determined based on the closing price at acquisition date of $19.84, and includes a minimal amount of cash paid in lieu of fractional shares.
(2)    Contingent consideration represents Metromile's contingently issuable shares that are convertible into Lemonade common stock in accordance with the exchange ratio as set forth in the merger agreement. In accordance with ASC 805-30-25-5, contingent consideration shall be recognized and measured at fair value as of the Acquisition Date. Given that the contingencies are not probable of being met within the contingency period, no fair value was assessed for these Metromile shares.
(3)    Fair value of replacement awards related to services rendered prior to the acquisition are included as part of purchase consideration. The unvested portion of fair value attributable to these replacement awards of $4.3 million comprised of $0.1 million for assumed options and $4.2 million for assumed restricted stock units ("RSUs"), and associated with future service will be recognized as expense over the future service period.
This Metromile Acquisition increased the Company's geographic footprint as a tech-enabled insurance provider and is expected to accelerate growth of the Lemonade car product, including other product offerings.

The Metromile Acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”). The purchase price was allocated to assets acquired and liabilities assumed based on the estimated fair values at the Acquisition Date. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, and will not be deductible for tax purposes. Goodwill from this business combination is primarily attributable to synergies from future expected economic benefits, enhanced revenue growth from expanded capabilities and geographic presence, including cost savings from streamlined operations and enhanced operational efficiencies.

The following table presents the preliminary allocation of purchase consideration recorded on the condensed consolidated balance sheet as of the Acquisition Date ($ in millions):

Assets acquired
Fixed maturities, available for sale, at fair value$1.8 
Short-term investments64.2 
Cash, cash equivalents and restricted cash98.8 
Premiums receivable17.4 
Reinsurance recoverable14.5 
Property and equipment4.6 
Value of business acquired ("VOBA")1.7 
Intangible assets - technology28.0 
Intangible assets - insurance licenses7.5 
Other assets14.7 
Total assets acquired$253.2 
Liabilities assumed
Unpaid loss and loss adjustment expenses$84.4 
Unearned premium15.1 
Trade payables0.8 
Ceded premium payable12.0 
Other liabilities and accrued expenses22.2 
Total liabilities assumed$134.5 
Total identifiable net assets acquired$118.7 
Total purchase consideration$137.7 
Goodwill$19.0 

Estimated fair values of assets acquired and liabilities assumed from Metromile are subject to change as we obtain additional information, and will be updated and finalized within the measurement period that will not extend beyond 12 months from the Acquisition Date.
The amounts, based on preliminary valuations and subject to final adjustment, allocated to intangible assets are as follows ($ in millions):
Fair ValueWeighted-Average Useful Life
Technology$28.0 
3 to 5 years
Insurance licenses7.5 N/A
Total$35.5 

The results of operations for Metromile of $19.8 million of revenue and $5.1 million of net loss have been included within the accompanying consolidated statements of operations and comprehensive loss for the three months ended March 31, 2023.

The Company incurred transaction and integration costs of approximately $0.5 million for the three months ended March 31, 2022, and were included in General and administrative expenses within the Company’s consolidated statements of operations and comprehensive loss.
v3.23.1
Investments
 3 Months Ended
Mar. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Investments Investments
Unrealized gains and losses
The following tables present cost or amortized cost and fair values of investment in fixed maturities as of March 31, 2023 and December 31, 2022 ($ in millions):
Cost or Amortized CostGross
Unrealized		Fair
Value
GainsLosses
March 31, 2023
Corporate debt securities$560.0 $0.6 $(15.2)$545.4 
U.S. Government obligations103.9 0.1 (2.7)101.3 
Asset-backed securities1.8 — — 1.8 
Total$665.7 $0.7 $(17.9)$648.5 
December 31, 2022
Corporate debt securities$549.7 $0.1 $(19.6)$530.2 
U.S. Government obligations121.0 — (3.7)117.3 
Asset-backed securities2.8 — — 2.8 
Total$673.5 $0.1 $(23.3)$650.3 

Gross unrealized losses for fixed maturities was $17.9 million as of March 31, 2023 and $23.3 million as of December 31, 2022. Gross unrealized gains and losses were recorded as a component of accumulated other comprehensive loss.
Contractual maturities of bonds
The following table presents the cost or amortized cost and estimated fair value of investments in fixed maturities as of March 31, 2023 by contractual maturity ($ in millions). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
March 31, 2023
Cost or
Amortized
Cost		Fair Value
Due in one year or less$213.0 $208.9 
Due after one year through five years452.7 439.6 
Due after five years through ten years— — 
Due after ten years— — 
Total$665.7 $648.5 
Net investment income
An analysis of net investment income follows ($ in millions):
Three Months Ended March 31,
20232022
Interest on cash and cash equivalents$1.2 $— 
Fixed maturities2.9 0.9 
Short-term investments1.0 0.1 
Total5.1 1.0 
Investment expense0.1 0.1 
Net investment income$5.0 $0.9 

Investment gains and losses
The Company had pre-tax net realized capital losses of less than $0.1 million for the three months ended March 31, 2023, and less than $0.1 million for the three months ended March 31, 2022.
Aging of gross unrealized losses
The following table presents the gross unrealized losses and related fair values for the Company’s investment in fixed maturities, grouped by duration of time in a continuous unrealized loss position as of March 31, 2023 and December 31, 2022 ($ in millions):
Less than 12 Months12 Months or MoreTotal
Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
March 31, 2023
Corporate debt securities$116.5 $(1.8)$368.3 $(13.4)$484.8 $(15.2)
U.S. Government obligations29.3 (0.2)53.6 (2.5)82.9 (2.7)
Asset-backed securities1.8 — — — 1.8 — 
Total$147.6 $(2.0)$421.9 $(15.9)$569.5 $(17.9)
Less than 12 Months12 Months or MoreTotal
Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
December 31, 2022
Corporate debt securities$83.6 $(2.1)$428.1 $(17.5)$511.7 $(19.6)
U.S. Government obligations29.6 (0.2)85.1 (3.5)114.7 (3.7)
Asset-backed securities2.8 — — — 2.8 — 
Total$116.0 $(2.3)$513.2 $(21.0)$629.2 $(23.3)

Investments in fixed maturities with gross unrealized losses for twelve months or more was $15.9 million and $21.0 million for March 31, 2023 and December 31, 2022, respectively.
As of March 31, 2023, 239 of the securities held were in an unrealized loss position. The Company determined that unrealized losses on fixed maturities were primarily due to the interest rate environment, and not credit risk related to the issuers of these securities. The Company does not intend to sell these investment in fixed maturities, and it is not more likely than not that that the Company will be required to sell these investment in fixed maturities before recovery of the amortized cost basis. No allowance for credit losses related to any of these securities was recorded for the three months ended March 31, 2023. The Company does not measure an allowance for credit losses on accrued interest receivable and would instead write off accrued interest receivable at the time an issuer defaults or is expected to default on payments.
v3.23.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The following tables present the Company’s fair value hierarchy for financial assets and liabilities measured as of March 31, 2023 and December 31, 2022 ($ in millions):

March 31, 2023
Level 1Level 2Level 3Total
Financial Assets:
Corporate debt securities$— $545.4 $— $545.4 
U.S. Government obligations— 101.3 — 101.3 
Asset-backed securities— 1.8 — 1.8 
Fixed maturities$— $648.5 $— $648.5 
Short term investments— 89.4 — 89.4 
Total$— $737.9 $— $737.9 
Financial Liabilities:
Warrant Liability (1)
$— $— $— $— 
(1) Fair value of Public and Private warrant liability amounted to less than $0.1 million as of March 31, 2023.
December 31, 2022
Level 1Level 2Level 3Total
Financial Assets:
Corporate debt securities$— $530.2 $— $530.2 
U.S. Government obligations— 117.3 — 117.3 
Asset-backed securities— 2.8 — 2.8 
Fixed maturities $— $650.3 $— 650.3 
Short term investments— 99.8 — 99.8 
Total$— $750.1 $— $750.1 
Financial Liabilities:
Warrant Liability$— $— $0.3 $0.3 
The fair value of all different classes of Level 2 fixed maturities and short-term investments are estimated by using quoted prices from a third-party valuation service provider to gather, analyze and interpret market information and derive fair values based upon relevant methodologies and assumptions for individual instruments.
There were no transfers between Level 1, Level 2, or Level 3 during the three months ended March 31, 2023, other than the public and private warrants previously reported as Level 3 as discussed below. There were no transfers between Level 1, Level 2, or Level 3 during the year ended December 31, 2022.
Warrant liability
As part of the Metromile Acquisition as discussed in Note 5, public and private warrants were assumed and are measured at fair value on a recurring basis at the end of the reporting period, and classified as level 3 for fair value hierarchy disclosure purposes as of December 31, 2022. These warrants do not meet the criteria for equity treatment and are recorded as a liability and presented under "Other Liabilities and Accrued Expenses" on the consolidated balance sheet at fair value, with changes in fair value recognized and presented under "General and Administrative expenses" in the consolidated statement of operations and comprehensive loss. The Company utilized the binomial Monte-Carlo simulation to estimate the fair value of the warrants which were not actively traded as of December 31, 2022.
As of March 31, 2023, the public warrants liability is classified as Level 1 for fair value hierarchy disclosure purposes, due to the use of an observable market quote in an active market, following the listing of the public warrants in New York Stock Exchange American. The Company also reclassified the private warrants liability from Level 3 to Level 2 as of March 31, 2023, as the Company considers the fair value of each private placement warrants to be equivalent to that of each public warrant, with an immaterial adjustment.
The following table below presents the change in fair value of the warrant liability (Public and Private) ($ in millions):
March 31, 2023
Balance as of January 1$0.3 
Initial measurement of warrants liability as of July 31, 2022— 
Change in fair value(0.3)
Balance as of March 31 (1)
$— 
(1) Fair value of Public and Private warrant liability amounted to less than $0.1 million as of March 31, 2023.
v3.23.1
Unpaid Loss and Loss Adjustment Expense
 3 Months Ended
Mar. 31, 2023
Insurance [Abstract]  
Unpaid Loss and Loss Adjustment Expense Unpaid Loss and Loss Adjustment Expense
The following table presents the activity in the liability for unpaid loss and loss adjustment expense ("LAE") for the three months ended March 31, 2023 and 2022 ($ in millions):
Three Months Ended March 31,
20232022
Unpaid loss and LAE at beginning of period$256.2 $97.9 
Less: Reinsurance recoverable at beginning of period (1)
124.6 72.7 
Net unpaid loss and LAE at beginning of period131.6 25.2 
Add: Incurred loss and LAE, net of reinsurance, related to:
Current year57.9 24.8 
Prior years5.7 (0.4)
Total incurred63.6 24.4 
Deduct: Paid loss and LAE, net of reinsurance, related to:
Current year26.9 10.6 
Prior years39.5 10.8 
Total paid66.4 21.4 
Unpaid loss and LAE, net of reinsurance recoverable, at end of period128.8 28.2 
Reinsurance recoverable at end of period (1)
116.4 79.4 
Unpaid loss and LAE, gross of reinsurance recoverable, at end of period$245.2 $107.6 
(1)    Reinsurance recoverable in this table includes only ceded unpaid loss and LAE
Unpaid loss and LAE includes anticipated salvage and subrogation recoverable.

Considerable variability is inherent in the estimate of the reserve for losses and LAE. Although management believes the liability recorded for losses and LAE is adequate, the variability inherent in this estimate could result in changes to the ultimate liability, which may be material to stockholders' equity. Additional variability exists due to accident year allocations of ceded amounts in accordance with reinsurance agreements, which is not expected to result in any changes to the ultimate liability. Other factors that can impact loss reserve development may also include trends in general economic conditions, including the effects of inflation. The Company had unfavorable development on net loss and LAE reserves of $5.7 million for the three months ended March 31, 2023, and favorable development on net loss and LAE reserves of $0.4 million for the three months ended March 31, 2022. No additional premiums or returned premiums have been accrued as a result of prior year effects.
For the three months ended March 31, 2023, current accident year incurred loss and LAE included $0.3 million of net incurred loss and LAE from Hurricane Ian, $9.6 million from winter storm Elliott and $0.9 million from the tornados that impacted customers in the Southeast. The net incurred loss and LAE from Hurricane Ian, winter storm Elliott and from the tornados as of March 31, 2023 represents the Company's best estimates based upon information currently available.
In the ordinary course of business, the Company cedes losses and LAE to other reinsurance companies. These arrangements reduce the net loss potentially arising from large or catastrophic risks. Certain of these arrangements consist of excess of loss and catastrophe contracts, which protect against losses exceeding stipulated amounts. The ceding of risk through reinsurance does not relieve the Company from its obligations to policyholders. The Company remains liable with respect to losses and LAE ceded in the event that any reinsurer does not meet obligations assumed under the reinsurance agreements. The Company does not have any significant unsecured aggregate recoverable for losses, paid and unpaid including Incurred But Not Reported ("IBNR"), loss adjustment expenses, and unearned premium with any individual reinsurer.
The Company maintained 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"). In exchange, these reinsurers paid a ceding commission for every dollar ceded, in addition to funding all of the corresponding claims at the same specified percentage as applied to premium. The Company opted to manage the remaining percentage of the business with alternative forms of reinsurance through non-proportional reinsurance contracts ("Non-Proportional Reinsurance Contracts").
The Company decreased the overall share of proportional reinsurance from 75% of the premium to 70% effective July 1, 2021, and to 55% effective July 1, 2022. In addition, the Company purchased a reinsurance program to protect against catastrophe risk in the U.S that exceed $80 million in losses effective July 1, 2022. Other non-proportional reinsurance contracts were renewed with terms similar to the expired contracts.
Metromile entered into a Quota Share reinsurance agreement effective January 1, 2022 through June 30, 2023. Under the terms of the agreement, the Company cedes 30% of premiums and losses to reinsurers.
v3.23.1
Other Liabilities and Accrued Expenses
 3 Months Ended
Mar. 31, 2023
Other Liabilities Disclosure [Abstract]  
Other Liabilities and Accrued Expenses Other Liabilities and Accrued Expenses
Other liabilities and accrued expenses as of March 31, 2023 and December 31, 2022 consist of the following ($ in millions):
March 31,December 31,
20232022
Lease liabilities $33.6 $35.2 
Accrued advertising costs11.0 6.8 
Uncertain tax position9.0 8.1 
Employee compensation7.7 12.8 
Accrued professional fees6.4 5.5 
Advance premium3.9 2.1 
Premium taxes payable3.6 6.2 
Accrued hosting and software2.5 2.0 
Income taxes payable0.7 0.6 
Warrant liability— 0.3 
Other payables6.6 4.9 
Total $85.0 $84.5 
v3.23.1
Stockholders' Equity
 3 Months Ended
Mar. 31, 2023
Equity [Abstract]  
Stockholders' Equity Stockholders’ Equity
Common stock
Upon closing of the IPO in 2020, the Company filed an amended and restated certificate of incorporation on July 7, 2020 with the Secretary of State of the State of Delaware to authorize the issuance of up to 200,000,000 shares of common stock, par value $0.00001 per share, and 10,000,000 shares of undesignated preferred stock, par value $0.00001 per share.
The Company completed a Follow-on Offering of common stock (the "Follow-on Offering") in 2021, which resulted in the issuance and sale of 3,300,000 shares of common stock of the Company, and 1,524,314 shares of common stock by certain selling shareholders, and generated net proceeds to the Company of $525.7 million after deducting underwriting discounts and commissions and other offering costs. The underwriters exercised their option to purchase additional shares, which resulted in the issuance and sale of an additional 718,647 shares of common stock of the Company, and generated additional net proceeds of $114.6 million to the Company after deducting underwriting discounts.
On July 28, 2022, the Company completed its acquisition of Metromile in which 6,901,934 shares of Lemonade's common stock were issued to Metromile stockholders as discussed in Note 5.
As of March 31, 2023 and December 31, 2022, the Company was authorized to issue 200,000,000 shares of par value $0.00001 per share common stock. The voting, dividend and liquidation rights of the holders of the Company’s common stock is subject to and qualified by the rights, powers and preferences of the holders of the preferred stock.
The Company in 2020 made a contribution of 500,000 newly issued shares of common stock to a related party, the Lemonade Foundation (see Note 14). In connection with the Follow-on Offering noted above, Lemonade Foundation sold 100,000 of the contributed shares of the Company.
Undesignated Preferred Stock
As of both March 31, 2023 and December 31, 2022, the Company's certificate of incorporation, as amended and restated, authorized the Company to issue up to 10,000,000 shares of undesignated preferred stock, par value $0.00001 per share. As of both March 31, 2023 and December 31, 2022, there were no shares of undesignated preferred stock issued or outstanding.
Warrants
On October 14, 2022, the Company entered into an omnibus agreement (the “Omnibus Agreement”) and a warrant agreement (the “Warrant Agreement” and, together with the Omnibus Agreement, the “Agreements”) with Chewy Insurance Services, LLC (the “Warrantholder”) in connection with the execution of an agency agreement on the same date between the Company, Lemonade Insurance Agency, LLC, Lemonade Insurance Company and the Warrantholder. In connection with the Agreements, the Company is authorized to issue to Warrantholders 3,352,025 shares of the Company’s common stock underlying the warrants with an exercise price of $0.01 per share, which will vest in installments on a yearly basis for a period of five years, subject to certain performance requirements. Vesting events and thresholds as specified in the Warrant Agreement.
v3.23.1
Stock-based Compensation
 3 Months Ended
Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-based Compensation Stock-based Compensation
Share option plans
2020 Incentive Compensation Plan
On July 2, 2020, the Company’s board of directors adopted and the Company’s stockholders approved the 2020 Incentive Compensation Plan (the “2020 Plan”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO on July 2, 2020. The 2020 Plan provides for the issuance of incentive stock options, non-qualified stock options, stock awards, stock units, stock appreciation rights and other stock-based awards.
The number of shares initially reserved for issuance under the 2020 Plan is 5,503,678 shares, inclusive of available shares previously reserved for issuance under the 2015 Incentive Share Option Plan, as amended and restated on September 4, 2019 (the “2015 Plan”). In addition, the number of shares reserved for issuance under the 2020 Plan is subject to increase for awards previously issued under the 2015 Plan which are forfeited or lapse unexercised. Annually, on the first day of each calendar year beginning on January 1, 2021 and ending on and including January 1, 2030, the reserve will be increased by an amount equal to the lesser of (A) 5% of the shares outstanding (on an as-converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares as determined by the Company’s board of directors, provided that no more than 3,650,000 shares may be issued upon the exercise of incentive stock options. On January 1, 2023, the 2020 Plan share pool was increased by 3,463,751 shares, equal to 5% of the aggregate number of outstanding common stock as of December 31, 2022. As of March 31, 2023, there were 6,407,211 shares of common stock available for future grants.
2020 Employee Stock Purchase Plan
On July 2, 2020, the Company's board of directors adopted and the Company's stockholders approved the 2020 Employee Stock Purchase Plan (the "2020 ESPP"), which became effective immediately prior to the effectiveness of the registration statement for the Company's IPO on July 2, 2020. The total shares of common stock initially reserved for issuance under the 2020 ESPP is limited to 1,000,000 shares. In addition, the number of shares available for issuance under the 2020 ESPP will be increased on January 1 of each calendar year beginning in 2021 and ending in and including 2030, by an amount equal to the lesser of (A) 1,000,000 shares, (B) 1% of the shares outstanding on the final day of the immediately preceding calendar year and (C) such smaller number of shares as is determined by the board of directors. The board of directors or a committee of the board of directors will administer and will have authority to interpret the terms of the 2020 ESPP and determine eligibility of participants. On January 1, 2023, there was no increase in the 2020 ESPP share pool. As of March 31, 2023, there were no shares of common stock issued under the 2020 ESPP.
2015 Incentive Share Option Plan
In July 2015, the Company adopted the 2015 Incentive Share Option Plan ("2015 Plan"). The 2015 Plan has been amended and restated from time to time to increase the number of shares reserved for grant and to enable the grant of options to employees of the Company’s subsidiaries. Under the 2015 Plan, options to purchase common stock of the Company may be granted to employees, officers, directors and consultants of the Company. Each option granted can be exercised for one share of common stock of the Company. Options granted to employees generally vest over a period of no more than four years. The options expire ten years from the date of grant.
Pursuant to the 2015 Plan, the Company had reserved 7,312,590 shares of common stock for issuance. Effective immediately upon the approval of the 2020 plan, the remaining shares of common stock available for future grant under the 2015 Plan were transferred to the 2020 Plan. As of March 31, 2023, there were no shares of common stock available for future grant under the 2015 Plan. Subsequent to the approval of the 2020 Plan, no additional grants will be made under the 2015 Plan and any outstanding awards under the 2015 Plan will continue with their original terms.
Assumed Share Option Plans
As part of the Metromile Acquisition, the Company assumed the Metromile 2011 Incentive Stock Plan ("2011 Plan") and Metromile 2021 Incentive Stock Plan ("2021 Plan") (collectively referred to as "Assumed Plans"). The equity awards assumed of 404,207 were granted from the respective Assumed Plans but will be settled in the Company's common stock (see Note 5). The remaining unallocated shares reserved under both 2011 Plan and 2021 Plan were cancelled and no new awards will be granted under these Assumed Plans.
Options granted to employees and non-employees
The fair value of each option granted for the three months ended March 31, 2023 and 2022 is estimated on the date of grant using the Black-Scholes model based on the following assumptions:
Three Months Ended March 31,
20232022
Weighted average expected term (years)6.06.1
Risk-free interest rate3.8%1.7%
Volatility72%48%
Expected dividend yield0%0%
Expected volatility is calculated based on implied volatility from market comparisons of certain publicly traded companies and other factors. The expected term of options granted is based on the simplified method, which uses the midpoint between the vesting date and the contractual term in accordance with ASC Topic 718, “Compensation — Stock Compensation.” The risk-free interest rate is based on observed interest rates appropriate for the term of the Company’s stock options. The dividend yield assumption is based on the Company’s historical and expected future dividend payouts and may be subject to substantial change in the future.
The following tables summarize activity of stock options and restricted stock units ("RSUs") ($ in millions, except for number of options and weighted average amounts):
Stock options
Number of
Options		Weighted-
Average
Exercise
Price		Weighted-Average Remaining Contractual Term (Years)Aggregate Intrinsic Value
Outstanding as of December 31, 2022 (1)
9,760,657$39.43 8.17$8.05 
Granted241,000 18.17 
Exercised(37,331)5.29 
Cancelled(455,318)39.14 
Outstanding as of March 31, 2023
9,509,008$38.89 7.75$8.28 
Options exercisable as of March 31, 2023
3,744,057$28.97 6.31$8.25 
Options unvested as of March 31, 2023
5,764,951$45.57 8.65$0.02 
(1) includes assumed options of 72,410 from the Metromile Acquisition (see Note 5)
Restricted Stock Units
Number of SharesGrant Date
Fair Value
Outstanding as of December 31, 2022 (1)
1,651,243 $27.92 
Granted589,373 18.16 
Vested(136,987)27.69 
Cancelled(103,689)23.98 
Outstanding as of March 31, 2023
1,999,940 $25.21 
(1) includes assumed restricted stock units of 331,797 from the Metromile Acquisition (see Note 5)
Stock-based compensation expense
Stock-based compensation expense from stock options and RSUs granted are included and classified in the condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022, including assumed awards from the Metromile Acquisition for the three months ended March 31, 2023, as follows ($ in millions):
Three Months Ended March 31,
20232022
Loss and loss adjustment expense, net$0.7 $0.6 
Other insurance expense0.5 0.3 
Sales and marketing1.2 1.5 
Technology development6.7 5.4 
General and administrative6.3 6.3 
Total stock-based compensation expense$15.4 $14.1 
Stock-based compensation expense classified by award type as included in the condensed consolidated statements of operations is as follows ($ in millions):
Three Months Ended March 31,
20232022
Stock options$11.0 $12.1 
RSUs4.4 2.0 
Total stock-based compensation expense$15.4 $14.1 
The total unrecognized expense granted to employees and non-employees outstanding at March 31, 2023 was $81.3 million for the stock options and $46.3 million for the RSUs, with a remaining weighted-average vesting period of 1.3 years for the stock options and 1.6 years for the RSUs.
v3.23.1
Income Taxes
 3 Months Ended
Mar. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The consolidated effective tax rate was (1.8)% and (3.0)% for the three months ended March 31, 2023 and 2022, respectively. The change in effective tax rate over the two periods was predominantly reflective of the change in profit before tax of the Company's foreign jurisdictions and uncertain tax positions.
Our unrecognized tax benefits related to tax positions, excluding penalty and interest amounted to $9.0 million as of March 31, 2023, and there was none as of March 31, 2022. The increase was primarily driven by the implementation of transfer pricing methodology. Interest and penalties related to unrecognized tax expense (benefits) are recognized in income tax expense, when applicable. There was $0.1 million interest and penalties as of March 31, 2023, and there was none as of March 31, 2022. We believe it is reasonably possible that our unrecognized tax benefits could increase within the next 12 months.
v3.23.1
Net Loss per Share
 3 Months Ended
Mar. 31, 2023
Earnings Per Share [Abstract]  
Net Loss per Share Net Loss per Share
Basic and diluted net loss per share attributable to common stockholders was calculated as follows :
Three Months Ended March 31,
20232022
Numerator:
Net loss attributable to common stockholders ($ in millions)$(65.8)$(74.8)
Denominator:
Weighted average common shares outstanding — basic and diluted69,334,10361,698,568
Net loss per share attributable to common stockholders — basic and diluted$(0.95)$(1.21)
The Company’s potentially dilutive securities, which include stock options and unvested RSUs, have been excluded from the computation of diluted net loss per share as the effect would be anti-dilutive. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect.
Three Months Ended March 31,
20232022
Options to purchase common stock9,509,008 6,355,274 
Unvested restricted stock1,999,940 475,749 
Warrants for common stock (1)
412,969 — 
Total11,921,917 6,831,023 
(1) Each outstanding warrant of Metromile assumed by the Company are converted automatically into warrants denominated in the Company's common stock with the number of warrants and exercise price adjusted based on the exchange ratio of 0.05263.
v3.23.1
Related Party Transactions
 3 Months Ended
Mar. 31, 2023
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
The Company uses the services of a travel agency owned by a relative of one of the Company’s key stockholders. The Company incurred travel expenses in the amount of less than $0.1 million for both the three months ended March 31, 2023, and March 31, 2022.
The Company historically leased office spaces in the United States, the Netherlands and the U.K. from an affiliate. Rental expense in connection with the leased space was less than $0.1 million for both the three months ended March 31, 2023 and March 31, 2022. There were no outstanding amounts due from or to related parties as of March 31, 2023 and December 31, 2022.
The Company’s Co-Chief Executive Officers, both of whom are also members of the Company’s board of directors, are the two sole members of the board of directors of the Lemonade Foundation. The Company contributed 500,000 shares of common stock with a fair market value of $24.36 per share (see Note 10). In connection with the Follow-on Offering as discussed in Note 10, Lemonade Foundation sold 100,000 shares of the contributed shares of the Company. As of March 31, 2023, there were no outstanding amounts due to or from the Lemonade Foundation.
v3.23.1
Contingencies
 3 Months Ended
Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Contingencies Contingencies
Litigation
The Company is occasionally a party to routine claims or litigation incidental to its business. The Company records accruals for loss contingencies with these legal matters when it is probable that a liability will be incurred, and the amount of the loss can be reasonably estimated.
Metromile Shareholder Litigation Matter
Following the announcement of Metromile's acquisition by the Company, multiple complaints were filed against Metromile and certain former officers and directors alleging that Metromile’s disclosures concerning the transaction were incomplete. Metromile also received demands to inspect its books and records under Delaware General Corporation Law Section 220, and one stockholder commenced litigation to enforce inspection rights. All of the foregoing complaints have been voluntarily dismissed with the plaintiffs reserving their rights to seek a fee in connection with each respective litigation. The Company will continue to monitor all legal issues and assess whether to accrue liability in accordance with ASC 450 based on new information and as further developments arise.
Charges and guarantees
The Company provided guarantees in an aggregate amount of $2.8 million as of March 31, 2023 and $2.7 million as of December 31, 2022 with respect to certain office leases.
v3.23.1
Geographical Breakdown of Gross Written Premium
 3 Months Ended
Mar. 31, 2023
Segment Reporting [Abstract]  
Geographical Breakdown of Gross Written Premium Geographical Breakdown of Gross Written Premium
The Company has a single reportable segment and offers insurance coverage under the homeowners multi-peril, inland marine, general liability and private passenger auto lines of business. Gross written premium includes direct and assumed premium. In December 2022, we began assuming premium related to car insurance policies written in Texas, in connection with our fronting arrangement with a third party carrier in Texas. Gross written premium by jurisdiction are as follows ($ in millions):
Three Months Ended March 31,
20232022
JurisdictionAmount% of GWPAmount% of GWP
California$45.5 27.7 %$27.1 24.5 %
Texas26.1 15.9 %20.2 18.3 %
New York18.4 11.2 %14.8 13.4 %
New Jersey8.6 5.2 %5.3 4.8 %
Illinois7.1 4.3 %4.4 4.0 %
Washington6.1 3.7 %2.0 1.8 %
Georgia4.9 3.0 %4.4 4.0 %
Oregon4.5 2.8 %2.0 1.9 %
Colorado4.3 2.6 %3.0 2.8 %
Arizona4.1 2.5 %2.2 2.0 %
All other34.4 21.1 %25.2 22.5 %
$164.0 100.0 %$110.6 100.0 %
v3.23.1
Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2023
Accounting Policies [Abstract]  
Basis of presentation The accompanying interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated upon consolidation. All foreign currency amounts in the condensed consolidated statement of operations and comprehensive loss have been translated using an average rate for the reporting period. All foreign currency balances in the balance sheet have been translated using the spot rate at the end of the reporting period. All figures expressed, except share amounts, are in U.S. dollars in millions.
Use of estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates estimates, including those related to contingent assets and liabilities as of the date of the consolidated financial statements as well as the reported amounts of revenue and expense during the reporting period. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities at the dates of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Significant estimates reflected in the Company’s condensed consolidated financial statements include, but are not limited to, reserves for loss and loss adjustment expense, reinsurance recoverables on unpaid losses, intangible assets, valuation allowance on deferred tax assets and the valuation of stock-based compensation prior to the Company’s Initial Public Offering (the “IPO”)
Cash, cash equivalents and restricted cash Cash and cash equivalents consist primarily of bank deposits and money market accounts with maturities of three months or less at the date of acquisition and are stated at cost, which approximates fair value. The Company’s restricted cash primarily relates to security deposits for certain office leases. The Company also collects insurance policy premiums that it holds in a segregated cash account for transmittal to the underwriting carrier, or settlement of insurance related claims. The carrying value of restricted cash approximates fair value.
New Accounting Pronouncements There are no new accounting standards not yet implemented that are expected to have a material effect on the Company's consolidated financial position or results of operations.
v3.23.1
Summary of Significant Accounting Policies (Tables)
 3 Months Ended
Mar. 31, 2023
Accounting Policies [Abstract]  
Cash and cash equivalents
The following represents the Company’s cash, cash equivalents and restricted cash as of March 31, 2023 and December 31, 2022:
March 31,December 31,
20232022
Cash and cash equivalents$250.1 $282.5 
Restricted cash4.7 4.0 
Total cash, cash equivalents and restricted cash$254.8 $286.5 
Restricted cash
The following represents the Company’s cash, cash equivalents and restricted cash as of March 31, 2023 and December 31, 2022:
March 31,December 31,
20232022
Cash and cash equivalents$250.1 $282.5 
Restricted cash4.7 4.0 
Total cash, cash equivalents and restricted cash$254.8 $286.5 
v3.23.1
Acquisition of Metromile (Tables)
 3 Months Ended
Mar. 31, 2023
Business Combination and Asset Acquisition [Abstract]  
Schedule of purchase price for acquisition
Fair value of consideration transferred for the Metromile Acquisition is as follows ($ in millions):

Metromile issued and outstanding stock exchanged for Lemonade common stock (1)
$136.9 
Contingent consideration (2)
— 
Metromile vested awards exchanged for Lemonade awards (3)
0.8 
Total Purchase Consideration$137.7 

(1)    The fair value of 6,901,934 shares issued and exchanged for Lemonade common stock was determined based on the closing price at acquisition date of $19.84, and includes a minimal amount of cash paid in lieu of fractional shares.
(2)    Contingent consideration represents Metromile's contingently issuable shares that are convertible into Lemonade common stock in accordance with the exchange ratio as set forth in the merger agreement. In accordance with ASC 805-30-25-5, contingent consideration shall be recognized and measured at fair value as of the Acquisition Date. Given that the contingencies are not probable of being met within the contingency period, no fair value was assessed for these Metromile shares.
(3)    Fair value of replacement awards related to services rendered prior to the acquisition are included as part of purchase consideration. The unvested portion of fair value attributable to these replacement awards of $4.3 million comprised of $0.1 million for assumed options and $4.2 million for assumed restricted stock units ("RSUs"), and associated with future service will be recognized as expense over the future service period.
Schedule of recognized identified assets acquired and liabilities assumed
The following table presents the preliminary allocation of purchase consideration recorded on the condensed consolidated balance sheet as of the Acquisition Date ($ in millions):

Assets acquired
Fixed maturities, available for sale, at fair value$1.8 
Short-term investments64.2 
Cash, cash equivalents and restricted cash98.8 
Premiums receivable17.4 
Reinsurance recoverable14.5 
Property and equipment4.6 
Value of business acquired ("VOBA")1.7 
Intangible assets - technology28.0 
Intangible assets - insurance licenses7.5 
Other assets14.7 
Total assets acquired$253.2 
Liabilities assumed
Unpaid loss and loss adjustment expenses$84.4 
Unearned premium15.1 
Trade payables0.8 
Ceded premium payable12.0 
Other liabilities and accrued expenses22.2 
Total liabilities assumed$134.5 
Total identifiable net assets acquired$118.7 
Total purchase consideration$137.7 
Goodwill$19.0 
Finite-lived and indefinite-lived intangible assets acquired as part of business combination
The amounts, based on preliminary valuations and subject to final adjustment, allocated to intangible assets are as follows ($ in millions):
Fair ValueWeighted-Average Useful Life
Technology$28.0 
3 to 5 years
Insurance licenses7.5 N/A
Total$35.5 
v3.23.1
Investments (Tables)
 3 Months Ended
Mar. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Amortized cost and fair values
The following tables present cost or amortized cost and fair values of investment in fixed maturities as of March 31, 2023 and December 31, 2022 ($ in millions):
Cost or Amortized CostGross
Unrealized		Fair
Value
GainsLosses
March 31, 2023
Corporate debt securities$560.0 $0.6 $(15.2)$545.4 
U.S. Government obligations103.9 0.1 (2.7)101.3 
Asset-backed securities1.8 — — 1.8 
Total$665.7 $0.7 $(17.9)$648.5 
December 31, 2022
Corporate debt securities$549.7 $0.1 $(19.6)$530.2 
U.S. Government obligations121.0 — (3.7)117.3 
Asset-backed securities2.8 — — 2.8 
Total$673.5 $0.1 $(23.3)$650.3 
Contractual maturities of bonds
The following table presents the cost or amortized cost and estimated fair value of investments in fixed maturities as of March 31, 2023 by contractual maturity ($ in millions). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
March 31, 2023
Cost or
Amortized
Cost		Fair Value
Due in one year or less$213.0 $208.9 
Due after one year through five years452.7 439.6 
Due after five years through ten years— — 
Due after ten years— — 
Total$665.7 $648.5 
Net investment income
An analysis of net investment income follows ($ in millions):
Three Months Ended March 31,
20232022
Interest on cash and cash equivalents$1.2 $— 
Fixed maturities2.9 0.9 
Short-term investments1.0 0.1 
Total5.1 1.0 
Investment expense0.1 0.1 
Net investment income$5.0 $0.9 
Aging of gross unrealized losses
The following table presents the gross unrealized losses and related fair values for the Company’s investment in fixed maturities, grouped by duration of time in a continuous unrealized loss position as of March 31, 2023 and December 31, 2022 ($ in millions):
Less than 12 Months12 Months or MoreTotal
Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
March 31, 2023
Corporate debt securities$116.5 $(1.8)$368.3 $(13.4)$484.8 $(15.2)
U.S. Government obligations29.3 (0.2)53.6 (2.5)82.9 (2.7)
Asset-backed securities1.8 — — — 1.8 — 
Total$147.6 $(2.0)$421.9 $(15.9)$569.5 $(17.9)
Less than 12 Months12 Months or MoreTotal
Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
December 31, 2022
Corporate debt securities$83.6 $(2.1)$428.1 $(17.5)$511.7 $(19.6)
U.S. Government obligations29.6 (0.2)85.1 (3.5)114.7 (3.7)
Asset-backed securities2.8 — — — 2.8 — 
Total$116.0 $(2.3)$513.2 $(21.0)$629.2 $(23.3)
v3.23.1
Fair Value Measurements (Tables)
 3 Months Ended
Mar. 31, 2023
Fair Value Disclosures [Abstract]  
Schedule of fair value hierarchy for financial assets and liabilities
The following tables present the Company’s fair value hierarchy for financial assets and liabilities measured as of March 31, 2023 and December 31, 2022 ($ in millions):

March 31, 2023
Level 1Level 2Level 3Total
Financial Assets:
Corporate debt securities$— $545.4 $— $545.4 
U.S. Government obligations— 101.3 — 101.3 
Asset-backed securities— 1.8 — 1.8 
Fixed maturities$— $648.5 $— $648.5 
Short term investments— 89.4 — 89.4 
Total$— $737.9 $— $737.9 
Financial Liabilities:
Warrant Liability (1)
$— $— $— $— 
(1) Fair value of Public and Private warrant liability amounted to less than $0.1 million as of March 31, 2023.
December 31, 2022
Level 1Level 2Level 3Total
Financial Assets:
Corporate debt securities$— $530.2 $— $530.2 
U.S. Government obligations— 117.3 — 117.3 
Asset-backed securities— 2.8 — 2.8 
Fixed maturities $— $650.3 $— 650.3 
Short term investments— 99.8 — 99.8 
Total$— $750.1 $— $750.1 
Financial Liabilities:
Warrant Liability$— $— $0.3 $0.3 
Schedule of warrant liability
The following table below presents the change in fair value of the warrant liability (Public and Private) ($ in millions):
March 31, 2023
Balance as of January 1$0.3 
Initial measurement of warrants liability as of July 31, 2022— 
Change in fair value(0.3)
Balance as of March 31 (1)
$— 
(1) Fair value of Public and Private warrant liability amounted to less than $0.1 million as of March 31, 2023.
v3.23.1
Unpaid Loss and Loss Adjustment Expense (Tables)
 3 Months Ended
Mar. 31, 2023
Insurance [Abstract]  
Activity in the liability for unpaid loss and LAE
The following table presents the activity in the liability for unpaid loss and loss adjustment expense ("LAE") for the three months ended March 31, 2023 and 2022 ($ in millions):
Three Months Ended March 31,
20232022
Unpaid loss and LAE at beginning of period$256.2 $97.9 
Less: Reinsurance recoverable at beginning of period (1)
124.6 72.7 
Net unpaid loss and LAE at beginning of period131.6 25.2 
Add: Incurred loss and LAE, net of reinsurance, related to:
Current year57.9 24.8 
Prior years5.7 (0.4)
Total incurred63.6 24.4 
Deduct: Paid loss and LAE, net of reinsurance, related to:
Current year26.9 10.6 
Prior years39.5 10.8 
Total paid66.4 21.4 
Unpaid loss and LAE, net of reinsurance recoverable, at end of period128.8 28.2 
Reinsurance recoverable at end of period (1)
116.4 79.4 
Unpaid loss and LAE, gross of reinsurance recoverable, at end of period$245.2 $107.6 
(1)    Reinsurance recoverable in this table includes only ceded unpaid loss and LAE
v3.23.1
Other Liabilities and Accrued Expenses (Tables)
 3 Months Ended
Mar. 31, 2023
Other Liabilities Disclosure [Abstract]  
Other liabilities and accrued expenses
Other liabilities and accrued expenses as of March 31, 2023 and December 31, 2022 consist of the following ($ in millions):
March 31,December 31,
20232022
Lease liabilities $33.6 $35.2 
Accrued advertising costs11.0 6.8 
Uncertain tax position9.0 8.1 
Employee compensation7.7 12.8 
Accrued professional fees6.4 5.5 
Advance premium3.9 2.1 
Premium taxes payable3.6 6.2 
Accrued hosting and software2.5 2.0 
Income taxes payable0.7 0.6 
Warrant liability— 0.3 
Other payables6.6 4.9 
Total $85.0 $84.5 
v3.23.1
Stock-based Compensation (Tables)
 3 Months Ended
Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Fair value assumptions
The fair value of each option granted for the three months ended March 31, 2023 and 2022 is estimated on the date of grant using the Black-Scholes model based on the following assumptions:
Three Months Ended March 31,
20232022
Weighted average expected term (years)6.06.1
Risk-free interest rate3.8%1.7%
Volatility72%48%
Expected dividend yield0%0%
Stock options activity
Stock options
Number of
Options		Weighted-
Average
Exercise
Price		Weighted-Average Remaining Contractual Term (Years)Aggregate Intrinsic Value
Outstanding as of December 31, 2022 (1)
9,760,657$39.43 8.17$8.05 
Granted241,000 18.17 
Exercised(37,331)5.29 
Cancelled(455,318)39.14 
Outstanding as of March 31, 2023
9,509,008$38.89 7.75$8.28 
Options exercisable as of March 31, 2023
3,744,057$28.97 6.31$8.25 
Options unvested as of March 31, 2023
5,764,951$45.57 8.65$0.02 
(1) includes assumed options of 72,410 from the Metromile Acquisition (see Note 5)
Restricted stock units activity
Restricted Stock Units
Number of SharesGrant Date
Fair Value
Outstanding as of December 31, 2022 (1)
1,651,243 $27.92 
Granted589,373 18.16 
Vested(136,987)27.69 
Cancelled(103,689)23.98 
Outstanding as of March 31, 2023
1,999,940 $25.21 
(1) includes assumed restricted stock units of 331,797 from the Metromile Acquisition (see Note 5)
Stock-based compensation expense
Stock-based compensation expense from stock options and RSUs granted are included and classified in the condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022, including assumed awards from the Metromile Acquisition for the three months ended March 31, 2023, as follows ($ in millions):
Three Months Ended March 31,
20232022
Loss and loss adjustment expense, net$0.7 $0.6 
Other insurance expense0.5 0.3 
Sales and marketing1.2 1.5 
Technology development6.7 5.4 
General and administrative6.3 6.3 
Total stock-based compensation expense$15.4 $14.1 
Stock-based compensation expense classified by award type as included in the condensed consolidated statements of operations is as follows ($ in millions):
Three Months Ended March 31,
20232022
Stock options$11.0 $12.1 
RSUs4.4 2.0 
Total stock-based compensation expense$15.4 $14.1 
v3.23.1
Net Loss per Share (Tables)
 3 Months Ended
Mar. 31, 2023
Earnings Per Share [Abstract]  
Basic and diluted net loss per share
Basic and diluted net loss per share attributable to common stockholders was calculated as follows :
Three Months Ended March 31,
20232022
Numerator:
Net loss attributable to common stockholders ($ in millions)$(65.8)$(74.8)
Denominator:
Weighted average common shares outstanding — basic and diluted69,334,10361,698,568
Net loss per share attributable to common stockholders — basic and diluted$(0.95)$(1.21)
Antidilutive potential common shares The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect.
Three Months Ended March 31,
20232022
Options to purchase common stock9,509,008 6,355,274 
Unvested restricted stock1,999,940 475,749 
Warrants for common stock (1)
412,969 — 
Total11,921,917 6,831,023 
(1) Each outstanding warrant of Metromile assumed by the Company are converted automatically into warrants denominated in the Company's common stock with the number of warrants and exercise price adjusted based on the exchange ratio of 0.05263.
v3.23.1
Geographical Breakdown of Gross Written Premium (Tables)
 3 Months Ended
Mar. 31, 2023
Segment Reporting [Abstract]  
Gross written premium by state
The Company has a single reportable segment and offers insurance coverage under the homeowners multi-peril, inland marine, general liability and private passenger auto lines of business. Gross written premium includes direct and assumed premium. In December 2022, we began assuming premium related to car insurance policies written in Texas, in connection with our fronting arrangement with a third party carrier in Texas. Gross written premium by jurisdiction are as follows ($ in millions):
Three Months Ended March 31,
20232022
JurisdictionAmount% of GWPAmount% of GWP
California$45.5 27.7 %$27.1 24.5 %
Texas26.1 15.9 %20.2 18.3 %
New York18.4 11.2 %14.8 13.4 %
New Jersey8.6 5.2 %5.3 4.8 %
Illinois7.1 4.3 %4.4 4.0 %
Washington6.1 3.7 %2.0 1.8 %
Georgia4.9 3.0 %4.4 4.0 %
Oregon4.5 2.8 %2.0 1.9 %
Colorado4.3 2.6 %3.0 2.8 %
Arizona4.1 2.5 %2.2 2.0 %
All other34.4 21.1 %25.2 22.5 %
$164.0 100.0 %$110.6 100.0 %
v3.23.1
Nature of the Business (Details)
 3 Months Ended
Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Percentage ownership in subsidiary 100.00%
v3.23.1
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)
$ in Millions
Mar. 31, 2023
Dec. 31, 2022
Mar. 31, 2022
Dec. 31, 2021
Accounting Policies [Abstract]        
Cash, cash equivalents and restricted cash $ 250.1 $ 282.5    
Restricted cash 4.7 4.0    
Total cash, cash equivalents and restricted cash $ 254.8 $ 286.5 $ 235.0 $ 270.6
v3.23.1
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)
$ in Millions
Jan. 14, 2021
Mar. 31, 2023
Dec. 31, 2022
Sale of Stock [Line Items]      
Lease liabilities   $ 33.6 $ 35.2
Underwriter's option      
Sale of Stock [Line Items]      
Net proceeds from sale $ 114.6    
v3.23.1
Acquisition of Metromile - Additional Information (Details) - Metromile
$ in Millions
 3 Months Ended 8 Months Ended
Jul. 28, 2022
shares
Mar. 31, 2023
USD ($)
Mar. 31, 2022
USD ($)
Mar. 31, 2023
USD ($)
Business Acquisition [Line Items]        
Percent of equity acquired 100.00%      
Conversion ratio 0.05263      
Shares issued for acquisition (in shares) | shares 6,901,934      
Business acquisition, pro forma revenue       $ 19.8
Business Acquisition, Pro Forma Net Income (Loss)   $ 5.1    
Transaction expenses     $ 0.5  
v3.23.1
Acquisition of Metromile - Schedule of Fair Value of Consideration Transferred (Details) - Metromile
$ / shares in Units, $ in Millions
Jul. 28, 2022
USD ($)
$ / shares
shares
Business Acquisition [Line Items]  
Metromile issued and outstanding stock exchanged for Lemonade common stock $ 136.9
Contingent consideration 0.0
Metromile vested awards exchanged for Lemonade awards 0.8
Total Purchase Consideration $ 137.7
Shares issued for acquisition (in shares) | shares 6,901,934
Business acquisition, share price (usd per share) | $ / shares $ 19.84
Remaining replacement awards, fair value $ 4.3
Options to purchase common stock  
Business Acquisition [Line Items]  
Remaining replacement awards, fair value 0.1
RSUs  
Business Acquisition [Line Items]  
Remaining replacement awards, fair value $ 4.2
v3.23.1
Acquisition of Metromile - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($)
$ in Millions
Jul. 28, 2022
Mar. 31, 2023
Dec. 31, 2022
Liabilities assumed      
Goodwill   $ 19.0 $ 19.0
Metromile      
Assets acquired      
Fixed maturities, available for sale, at fair value $ 1.8    
Short-term investments 64.2    
Cash, cash equivalents and restricted cash 98.8    
Premiums receivable 17.4    
Reinsurance recoverable 14.5    
Property and equipment 4.6    
Value of business acquired ("VOBA") 1.7    
Other assets 14.7    
Total assets acquired 253.2    
Liabilities assumed      
Unpaid loss and loss adjustment expenses 84.4    
Unearned premium 15.1    
Trade payables 0.8    
Ceded premium payable 12.0    
Other liabilities and accrued expenses 22.2    
Total liabilities assumed 134.5    
Total identifiable net assets acquired 118.7    
Total purchase consideration 137.7    
Goodwill 19.0    
Metromile | Technology      
Assets acquired      
Intangible asset 28.0    
Metromile | Insurance licenses      
Assets acquired      
Intangible asset $ 7.5    
v3.23.1
Acquisition of Metromile - Amounts Allocated to Intangible Assets (Details) - Metromile
$ in Millions
Jul. 28, 2022
USD ($)
Finite-Lived Intangible Assets [Line Items]  
Fair Value $ 35.5
Technology  
Finite-Lived Intangible Assets [Line Items]  
Fair Value $ 28.0
Technology | Minimum  
Finite-Lived Intangible Assets [Line Items]  
Weighted-Average Useful Life 3 years
Technology | Maximum  
Finite-Lived Intangible Assets [Line Items]  
Weighted-Average Useful Life 5 years
Insurance licenses  
Finite-Lived Intangible Assets [Line Items]  
Fair Value $ 7.5
v3.23.1
Acquisition of Metromile - Business Combinations and Asset Acquisitions (Details) - Metromile - USD ($)
$ in Millions
 3 Months Ended 8 Months Ended
Mar. 31, 2023
Mar. 31, 2023
Business Acquisition [Line Items]    
Business Acquisition, Pro Forma Revenue   $ 19.8
Business Acquisition, Pro Forma Net Income (Loss) $ 5.1  
v3.23.1
Investments - Amortized Cost and Fair Values (Details) - USD ($)
$ in Millions
Mar. 31, 2023
Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]    
Cost or Amortized Cost $ 665.7 $ 673.5
Gross unrealized gains 0.7 0.1
Gross unrealized losses (17.9) (23.3)
Fair Value 648.5 650.3
Corporate debt securities    
Debt Securities, Available-for-sale [Line Items]    
Cost or Amortized Cost 560.0 549.7
Gross unrealized gains 0.6 0.1
Gross unrealized losses (15.2) (19.6)
Fair Value 545.4 530.2
U.S. Government obligations    
Debt Securities, Available-for-sale [Line Items]    
Cost or Amortized Cost 103.9 121.0
Gross unrealized gains 0.1 0.0
Gross unrealized losses (2.7) (3.7)
Fair Value 101.3 117.3
Asset-backed securities    
Debt Securities, Available-for-sale [Line Items]    
Cost or Amortized Cost 1.8 2.8
Gross unrealized gains 0.0 0.0
Gross unrealized losses 0.0 0.0
Fair Value $ 1.8 $ 2.8
v3.23.1
Investments - Additional Information (Details)
$ in Millions
 3 Months Ended
Mar. 31, 2023
USD ($)
security
Mar. 31, 2022
USD ($)
Dec. 31, 2022
USD ($)
Investments, Debt and Equity Securities [Abstract]      
Gross unrealized losses $ 17.9   $ 23.3
Realized investment losses (less than) 0.1 $ 0.1  
Gross unrealized losses, twelve months or more $ 15.9   $ 21.0
Number of debt securities held, unrealized loss position | security 239    
Financing receivable, allowance for credit loss $ 0.0    
v3.23.1
Investments - Contractual Maturities of Bonds (Details) - USD ($)
$ in Millions
Mar. 31, 2023
Dec. 31, 2022
Cost or Amortized Cost    
Due in one year or less $ 213.0  
Due after one year through five years 452.7  
Due after five years through ten years 0.0  
Due after ten years 0.0  
Cost or Amortized Cost 665.7 $ 673.5
Fair Value    
Due in one year or less 208.9  
Due after one year through five years 439.6  
Due after five years through ten years 0.0  
Due after ten years 0.0  
Fair Value $ 648.5 $ 650.3
v3.23.1
Investments - Net Investment Income (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Net Investment Income [Line Items]    
Gross investment income $ 5.1 $ 1.0
Investment expense 0.1 0.1
Net investment income 5.0 0.9
Interest on cash and cash equivalents    
Net Investment Income [Line Items]    
Net investment income 1.2 0.0
Fixed maturities    
Net Investment Income [Line Items]    
Net investment income 2.9 0.9
Short-term investments    
Net Investment Income [Line Items]    
Net investment income $ 1.0 $ 0.1
v3.23.1
Investments - Aging of Gross Unrealized Losses (Details) - USD ($)
$ in Millions
Mar. 31, 2023
Dec. 31, 2022
Fair Value    
Less than 12 Months $ 147.6 $ 116.0
12 Months or More 421.9 513.2
Fair Value 569.5 629.2
Gross Unrealized Losses    
Less than 12 Months (2.0) (2.3)
12 Months or More (15.9) (21.0)
Gross Unrealized Losses (17.9) (23.3)
Corporate debt securities    
Fair Value    
Less than 12 Months 116.5 83.6
12 Months or More 368.3 428.1
Fair Value 484.8 511.7
Gross Unrealized Losses    
Less than 12 Months (1.8) (2.1)
12 Months or More (13.4) (17.5)
Gross Unrealized Losses (15.2) (19.6)
U.S. Government obligations    
Fair Value    
Less than 12 Months 29.3 29.6
12 Months or More 53.6 85.1
Fair Value 82.9 114.7
Gross Unrealized Losses    
Less than 12 Months (0.2) (0.2)
12 Months or More (2.5) (3.5)
Gross Unrealized Losses (2.7) (3.7)
Asset-backed securities    
Fair Value    
Less than 12 Months 1.8 2.8
12 Months or More 0.0 0.0
Fair Value 1.8 2.8
Gross Unrealized Losses    
Less than 12 Months 0.0 0.0
12 Months or More 0.0 0.0
Gross Unrealized Losses $ 0.0 $ 0.0
v3.23.1
Fair Value Measurements - Fair Value Hierarchy for Financial Assets and Liabilities (Details) - USD ($)
$ in Millions
Mar. 31, 2023
Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities $ 648.5 $ 650.3
Short term investments 89.4 99.8
Financial Assets: 737.9 750.1
Corporate debt securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities 545.4 530.2
U.S. Government obligations    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities 101.3 117.3
Asset-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities 1.8 2.8
Warrant Liability    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial Liabilities: 0.0 0.3
Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities 0.0 0.0
Short term investments 0.0 0.0
Financial Assets: 0.0 0.0
Level 1 | Corporate debt securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities 0.0 0.0
Level 1 | U.S. Government obligations    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities 0.0 0.0
Level 1 | Asset-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities 0.0 0.0
Level 1 | Warrant Liability    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial Liabilities: 0.0 0.0
Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities 648.5 650.3
Short term investments 89.4 99.8
Financial Assets: 737.9 750.1
Level 2 | Corporate debt securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities 545.4 530.2
Level 2 | U.S. Government obligations    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities 101.3 117.3
Level 2 | Asset-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities 1.8 2.8
Level 2 | Warrant Liability    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial Liabilities: 0.0 0.0
Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities 0.0 0.0
Short term investments 0.0 0.0
Financial Assets: 0.0 0.0
Level 3 | Corporate debt securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities 0.0 0.0
Level 3 | U.S. Government obligations    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities 0.0 0.0
Level 3 | Asset-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fixed maturities 0.0 0.0
Level 3 | Warrant Liability    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial Liabilities: $ 0.0 $ 0.3
v3.23.1
Fair Value Measurements - Change in Fair Value of Warrant (Details)
$ in Millions
 3 Months Ended
Mar. 31, 2023
USD ($)
Warrants Roll Forward [Abstract]  
Warrants beginning balance $ 0.3
Initial measurement of warrants liability as of July 31, 2022 0.0
Change in fair value (0.3)
Warrants ending balance 0.0
Fair value of warrant liability (less than) $ 0.1
v3.23.1
Unpaid Loss and Loss Adjustment Expense - Activity (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]    
Unpaid loss and LAE at beginning of period $ 256.2 $ 97.9
Less: Reinsurance recoverable at beginning of period 124.6 72.7
Net unpaid loss and LAE at beginning of period 131.6 25.2
Add: Incurred loss and LAE, net of reinsurance, related to:    
Current year 57.9 24.8
Prior years 5.7 (0.4)
Total incurred 63.6 24.4
Deduct: Paid loss and LAE, net of reinsurance, related to:    
Current year 26.9 10.6
Prior years 39.5 10.8
Total paid 66.4 21.4
Unpaid loss and LAE, net of reinsurance recoverable, at end of period 128.8 28.2
Reinsurance recoverable at end of period 116.4 79.4
Unpaid loss and LAE, gross of reinsurance recoverable, at end of period $ 245.2 $ 107.6
v3.23.1
Unpaid Loss and Loss Adjustment Expense - Additional Information (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended 12 Months Ended
Jul. 01, 2022
Mar. 31, 2023
Mar. 31, 2022
Jun. 30, 2021
Jun. 30, 2022
Effects of Reinsurance [Line Items]          
Favorable development on net loss and LAE reserves   $ 5.7 $ (0.4)    
Current accident year incurred loss and LAE   57.9 $ 24.8    
Reinsurance program, minimum losses threshold   $ 80.0      
Reinsurance Contract [Axis]: Premiums and Losses to Reinsurers          
Effects of Reinsurance [Line Items]          
Percent of contracts subject to participation through reinsurance   30.00%      
Reinsurance Contract [Axis]: Proportional Reinsurance Contracts          
Effects of Reinsurance [Line Items]          
Percent of contracts subject to participation through reinsurance 55.00%     75.00% 70.00%
Hurricane Ian          
Effects of Reinsurance [Line Items]          
Current accident year incurred loss and LAE   $ 0.3      
Winter Storm Elliot          
Effects of Reinsurance [Line Items]          
Current accident year incurred loss and LAE   9.6      
Tornados In Southeast          
Effects of Reinsurance [Line Items]          
Current accident year incurred loss and LAE   $ 0.9      
v3.23.1
Other Liabilities and Accrued Expenses (Details) - USD ($)
$ in Millions
Mar. 31, 2023
Dec. 31, 2022
Other Liabilities Disclosure [Abstract]    
Lease liabilities $ 33.6 $ 35.2
Accrued advertising costs 11.0 6.8
Uncertain tax position 9.0 8.1
Employee compensation 7.7 12.8
Accrued professional fees 6.4 5.5
Advance premium 3.9 2.1
Premium taxes payable 3.6 6.2
Accrued hosting and software 2.5 2.0
Income taxes payable 0.7 0.6
Warrant liability 0.0 0.3
Other payables 6.6 4.9
Total $ 85.0 $ 84.5
v3.23.1
Stockholders' Equity (Details) - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 12 Months Ended
Oct. 14, 2022
Jan. 14, 2021
Mar. 31, 2023
Dec. 31, 2020
Dec. 31, 2022
Jul. 07, 2020
Sale of Stock [Line Items]            
Common stock, authorized (in shares)     200,000,000   200,000,000 200,000,000
Common stock, par value (usd per share)     $ 0.00001   $ 0.00001 $ 0.00001
Preferred stock, authorized (in shares)     10,000,000   10,000,000 10,000,000
Preferred stock, par value (usd per share)     $ 0.00001   $ 0.00001 $ 0.00001
Preferred stock, issued (in shares)     0   0  
Preferred stock, outstanding (in shares)     0   0  
Omnibus Agreement            
Sale of Stock [Line Items]            
Class of warrant issued of common stock (in shares) 3,352,025          
Class of warrant common stock exercise price (usd per share) $ 0.01          
Vesting period 5 years          
The Lemonade Foundation | Affiliated entity            
Sale of Stock [Line Items]            
Contribution to the Lemonade Foundation (in shares)     500,000 500,000    
Follow-on Offering            
Sale of Stock [Line Items]            
Common stock sold (in shares)   3,300,000        
Net proceeds from sale   $ 525.7        
Follow-on Offering, Selling Shareholders            
Sale of Stock [Line Items]            
Common stock sold (in shares)   1,524,314        
Follow-on Offering, Selling Shareholders | The Lemonade Foundation            
Sale of Stock [Line Items]            
Common stock sold (in shares)   100,000        
Underwriter's option            
Sale of Stock [Line Items]            
Common stock sold (in shares)   718,647        
Net proceeds from sale   $ 114.6        
v3.23.1
Stock-based Compensation - Additional Information (Details)
$ in Millions
 3 Months Ended
Jan. 01, 2022
shares
Jul. 02, 2020
shares
Mar. 31, 2023
USD ($)
employee
shares
Jul. 31, 2015
shares
Stock options        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Unrecognized expense, stock options | $     $ 81.3  
Unrecognized expense, period for recognition     1 year 3 months 18 days  
RSUs        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Unrecognized expense, RSUs | $     $ 46.3  
Unrecognized expense, period for recognition     1 year 7 months 6 days  
2020 Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Common stock reserved for issuance (in shares)   5,503,678    
Common stock reserved for issuance, annual increase, percentage of outstanding shares 5.00% 5.00%    
Maximum shares that may be issued upon exercise of incentive stock options (in shares)   3,650,000    
Additional shares authorized (in shares) 3,463,751      
Common stock available for grant (in shares)     6,407,211  
2020 ESPP        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Common stock reserved for issuance (in shares)   1,000,000    
Common stock reserved for issuance, annual increase, percentage of outstanding shares   1.00%    
Common stock available for grant (in shares)     0  
Number of shares available for issuance, annual increase (in shares)   1,000,000    
2015 Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Common stock reserved for issuance (in shares)       7,312,590
Common stock available for grant (in shares)     0  
Number of shares of common stock per exercised option | employee     1  
2015 Plan | Stock options        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Vesting period     4 years  
Expiration period     10 years  
Incentive Stock Plan 2021        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based compensation equity awards granted (in shares)     404,207  
v3.23.1
Stock-based Compensation - Fair Value Assumptions (Details) - Stock options
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Weighted average expected term (years) 6 years 6 years 1 month 6 days
Risk-free interest rate 3.80% 1.70%
Volatility 72.00% 48.00%
Expected dividend yield 0.00% 0.00%
v3.23.1
Stock-based Compensation - Stock Options Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 12 Months Ended
Mar. 31, 2023
Dec. 31, 2022
Number of Options    
Outstanding (in shares) 9,760,657  
Granted (in shares) 241,000  
Exercised (in shares) (37,331)  
Cancelled (in shares) (455,318)  
Outstanding (in shares) 9,509,008 9,760,657
Exercisable (in shares) 3,744,057  
Unvested (in shares) 5,764,951  
Weighted- Average Exercise Price    
Outstanding (usd per share) $ 39.43  
Granted (usd per share) 18.17  
Exercised (usd per share) 5.29  
Cancelled (usd per share) 39.14  
Outstanding (usd per share) 38.89 $ 39.43
Exercisable, weighted-average exercise price (usd per share) 28.97  
Unvested, weighted-average exercise price (usd per share) $ 45.57  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]    
Outstanding, weighted-average remaining contractual, term 7 years 9 months 8 years 2 months 1 day
Exercisable, weighted-average remaining contractual, term 6 years 3 months 21 days  
Unvested, weighted-average remaining contractual, term 8 years 7 months 24 days  
Outstanding, aggregate intrinsic value, outstanding $ 8,280 $ 8,050
Exercisable, aggregate intrinsic value 8,250  
Unvested, aggregate intrinsic value $ 20  
Assumed from acquisition (in shares) 72,410  
v3.23.1
Stock-based Compensation - Restricted Stock Units Activity (Details) - RSUs
 3 Months Ended
Mar. 31, 2023
$ / shares
shares
Number of Shares  
Outstanding (in shares) 1,651,243
Granted (in shares) 589,373
Vested (in shares) (136,987)
Cancelled (in shares) (103,689)
Outstanding (in shares) 1,999,940
Grant Date Fair Value  
Outstanding (usd per share) | $ / shares $ 27.92
Granted (usd per share) | $ / shares 18.16
Vested (usd per share) | $ / shares 27.69
Cancelled (usd per share) | $ / shares 23.98
Outstanding (usd per share) | $ / shares $ 25.21
Assumed (in shares) 331,797
v3.23.1
Stock-based Compensation - Expense (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Stock-based compensation expense $ 15.4 $ 14.1
Options to purchase common stock    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Stock-based compensation expense 11.0 12.1
RSUs    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Stock-based compensation expense 4.4 2.0
Loss and loss adjustment expense, net    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Stock-based compensation expense 0.7 0.6
Other insurance expense    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Stock-based compensation expense 0.5 0.3
Sales and marketing    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Stock-based compensation expense 1.2 1.5
Technology development    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Stock-based compensation expense 6.7 5.4
General and administrative    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Stock-based compensation expense $ 6.3 $ 6.3
v3.23.1
Income Taxes (Details) - USD ($)
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Income Tax Disclosure [Abstract]    
Effective tax rate (1.80%) (3.00%)
Unrecognized tax benefits $ 9,000,000 $ 0
Unrecognized tax benefits, income tax penalties and interest accrued $ 100,000 $ 0
v3.23.1
Net Loss per Share - Reconciliation (Details) - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Numerator:    
Net loss attributable to common stockholders - basic $ (65.8) $ (74.8)
Net loss attributable to common stockholders - diluted $ (65.8) $ (74.8)
Denominator:    
Weighted average common shares outstanding—basic (in shares) 69,334,103 61,698,568
Weighted average common shares outstanding—diluted (in shares) 69,334,103 61,698,568
Net loss per share attributable to common stockholders—basic (usd per share) $ (0.95) $ (1.21)
Net loss per share attributable to common stockholders—diluted (usd per share) $ (0.95) $ (1.21)
v3.23.1
Net Loss per Share - Antidilutive Potential Common Shares (Details)
 3 Months Ended
Jul. 28, 2022
Mar. 31, 2023
shares
Mar. 31, 2022
shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive potential common stock (in shares)   11,921,917 6,831,023
Metromile      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Conversion ratio 0.05263    
Options to purchase common stock      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive potential common stock (in shares)   9,509,008 6,355,274
Unvested restricted stock      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive potential common stock (in shares)   1,999,940 475,749
Warrants for common stock      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive potential common stock (in shares)   412,969 0
v3.23.1
Related Party Transactions (Details)
 3 Months Ended 12 Months Ended
Jan. 14, 2021
shares
Mar. 31, 2023
USD ($)
director
$ / shares
shares
Mar. 31, 2022
USD ($)
Dec. 31, 2020
shares
Dec. 31, 2022
USD ($)
Related Party Transaction [Line Items]          
Due to (from) related parties   $ 0     $ 0
Follow-on Offering, Selling Shareholders          
Related Party Transaction [Line Items]          
Common stock sold (in shares) | shares 1,524,314        
The Lemonade Foundation | Follow-on Offering, Selling Shareholders          
Related Party Transaction [Line Items]          
Common stock sold (in shares) | shares 100,000        
Affiliated entity | The Lemonade Foundation          
Related Party Transaction [Line Items]          
Number of shared directors | director   2      
Contribution to the Lemonade Foundation (in shares) | shares   500,000   500,000  
Contribution of common stock to related party, fair value (usd per share) | $ / shares   $ 24.36      
Due from related party   $ 0      
Travel related expenses | Key stockholder          
Related Party Transaction [Line Items]          
Expenses with related parties (less than)   100,000      
Rental expense | Affiliated entity          
Related Party Transaction [Line Items]          
Expenses with related parties (less than)   $ 100,000 $ 100,000    
v3.23.1
Contingencies (Details)
$ in Millions
 3 Months Ended
Mar. 31, 2023
USD ($)
employee
Dec. 31, 2022
USD ($)
Loss Contingencies [Line Items]    
Number of Stockholders | employee 1  
Office leases, payment guarantees    
Loss Contingencies [Line Items]    
Guarantees | $ $ 2.8 $ 2.7
v3.23.1
Geographical Breakdown of Gross Written Premium (Details)
$ in Millions
 3 Months Ended
Mar. 31, 2023
USD ($)
segment
Mar. 31, 2022
USD ($)
Revenues from External Customers and Long-Lived Assets [Line Items]    
Amount $ 164.0 $ 110.6
Number of reportable segments | segment 1  
Gross written premium | Geographic Concentration Risk    
Revenues from External Customers and Long-Lived Assets [Line Items]    
% of GWP 100.00% 100.00%
California    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Amount $ 45.5 $ 27.1
California | Gross written premium | Geographic Concentration Risk    
Revenues from External Customers and Long-Lived Assets [Line Items]    
% of GWP 27.70% 24.50%
Texas    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Amount $ 26.1 $ 20.2
Texas | Gross written premium | Geographic Concentration Risk    
Revenues from External Customers and Long-Lived Assets [Line Items]    
% of GWP 15.90% 18.30%
New York    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Amount $ 18.4 $ 14.8
New York | Gross written premium | Geographic Concentration Risk    
Revenues from External Customers and Long-Lived Assets [Line Items]    
% of GWP 11.20% 13.40%
New Jersey    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Amount $ 8.6 $ 5.3
New Jersey | Gross written premium | Geographic Concentration Risk    
Revenues from External Customers and Long-Lived Assets [Line Items]    
% of GWP 5.20% 4.80%
Illinois    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Amount $ 7.1 $ 4.4
Illinois | Gross written premium | Geographic Concentration Risk    
Revenues from External Customers and Long-Lived Assets [Line Items]    
% of GWP 4.30% 4.00%
Washington    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Amount $ 6.1 $ 2.0
Washington | Gross written premium | Geographic Concentration Risk    
Revenues from External Customers and Long-Lived Assets [Line Items]    
% of GWP 3.70% 1.80%
Georgia    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Amount $ 4.9 $ 4.4
Georgia | Gross written premium | Geographic Concentration Risk    
Revenues from External Customers and Long-Lived Assets [Line Items]    
% of GWP 3.00% 4.00%
Oregon    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Amount $ 4.5 $ 2.0
Oregon | Gross written premium | Geographic Concentration Risk    
Revenues from External Customers and Long-Lived Assets [Line Items]    
% of GWP 2.80% 1.90%
Colorado    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Amount $ 4.3 $ 3.0
Colorado | Gross written premium | Geographic Concentration Risk    
Revenues from External Customers and Long-Lived Assets [Line Items]    
% of GWP 2.60% 2.80%
Arizona    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Amount $ 4.1 $ 2.2
Arizona | Gross written premium | Geographic Concentration Risk    
Revenues from External Customers and Long-Lived Assets [Line Items]    
% of GWP 2.50% 2.00%
All other    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Amount $ 34.4 $ 25.2
All other | Gross written premium | Geographic Concentration Risk    
Revenues from External Customers and Long-Lived Assets [Line Items]    
% of GWP 21.10% 22.50%