Insurtech Lemonade reported a first quarter 2025 net loss of about $62.4 million compared to a loss of $47.3 million a year ago during the same time.
The decline, according to a letter to shareholders, was due primarily to losses from the California wildfires and subsequent FAIR Plan assessments in the state, as well as an increase in growth spend for customer acquisition.
Lemonade said the losses from wildfires were within expectations—a gross loss of $44 million and net loss of $29 million. The FAIR Plan assessment cost was nearly $7 million.
The insurer said its aerial imagery and artificial intelligence technology “created a streamlined experience for our customers.”
“We were able to resolve many claims within minutes, and several at their policy limits,” while the company “preserved our rights to recover from responsible parties,” it said in the letter from CEO Daniel Schreiber.
Lemonade said its Q1 gross loss ratio was 78, with 16 pointed attributed to the wildfires. Gross profit increased 11% in Q1 2025 to about $39 million as in force premium (IFP) grew 27% year-over-year to about $1 billion for the insurer’s sixth straight quarter of growth and building on Q4 2024, which Schreiber said was Lemonade’s “best quarter ever.”
Lemonade executives have guided toward $1.2 billion of in force premiums by year-end 2025, or a 28% jump over last year, with its auto insurance product playing a key role.
Related: Lemonade: 700K Customers on the Car Insurance Waitlist
The Lemonade Car product, launched recently in Colorado with other state launches planned this year, outpaced the rest of the book in IFP for the first time in Q1. Colorado brought Lemonade Car’s coverage level to over 40% of the U.S. auto insurance market and to 60% of its customer base. Young, safe drivers have become its target customer for the telematics-based product.
“We are still in early innings but with unique advantages, improving unit economics, and growing momentum, Lemonade Car is positioned to become both a category leader and a meaningful driver of long-term value,” the company said.
Topics Catastrophe Natural Disasters Trends Profit Loss Wildfire Auto
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