Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 10, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
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 | |
Title of 12(b) Security | Common Stock, $0.00001 par value per share | |
Trading Symbol | LMND | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 61,556,857 | |
Amendment Flag | false | |
Entity Central Index Key | 0001691421 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Investments | ||
Fixed maturities available-for-sale, at fair value (amortized cost: $71.3 million and $6.4 million as of June 30, 2021 and December 31, 2020) | $ 71.2 | $ 6.6 |
Total investments | 71.2 | 6.6 |
Cash, cash equivalents and restricted cash | 1,092.7 | 571.4 |
Premium receivable, net of allowance for doubtful accounts of $0.7 million and $0.5 million as of June 30, 2021 and December 31, 2020 | 108.1 | 86.1 |
Reinsurance recoverable | 64.7 | 49 |
Prepaid reinsurance premium | 120.3 | 91.3 |
Deferred acquisition costs | 4.9 | 3.5 |
Property and equipment, net | 8.8 | 5.7 |
Intangible assets | 0.6 | 0.6 |
Other assets | 16 | 14.5 |
Total assets | 1,487.3 | 828.7 |
Liabilities and Stockholders' Equity | ||
Unpaid loss and loss adjustment expense | 64.7 | 46.3 |
Unearned premium | 166 | 123.8 |
Trade payables | 1.3 | 1.4 |
Funds held for reinsurance treaties | 77.6 | 62.1 |
Deferred ceding commission | 30.1 | 22.4 |
Ceded premium payable | 18 | 13 |
Other liabilities and accrued expenses | 28 | 18.7 |
Total liabilities | 385.7 | 287.7 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Common stock, $0.00001 par value, 200,000,000 shares authorized; 61,532,127 and 56,774,294 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | 0 | 0 |
Additional paid-in capital | 1,525.9 | 859.8 |
Accumulated deficit | (425.2) | (320.6) |
Accumulated other comprehensive income | 0.9 | 1.8 |
Total stockholders' equity | 1,101.6 | 541 |
Total liabilities and stockholders' equity | $ 1,487.3 | $ 828.7 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Amortized cost, available-for-sale securities | $ 71.3 | $ 6.4 |
Premium receivable, allowance for doubtful accounts | $ 0.7 | $ 0.5 |
Common stock, par value (usd per share) | $ 0.00001 | $ 0.00001 |
Common stock, authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, issued (shares) | 61,532,127 | 56,774,294 |
Common stock, outstanding (shares) | 61,532,127 | 56,774,294 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue | ||||
Net earned premium | $ 16.3 | $ 29.2 | $ 30.1 | $ 54.5 |
Ceding commission income | 10.6 | 0.4 | 19.6 | 0.4 |
Net investment income | 0.2 | 0.2 | 0.4 | 1.1 |
Commission and other income | 1.1 | 0.1 | 1.6 | 0.1 |
Total revenue | 28.2 | 29.9 | 51.7 | 56.1 |
Expense | ||||
Loss and loss adjustment expense, net | 13 | 20.5 | 29.5 | 38.7 |
Other insurance expense | 5.2 | 4 | 10 | 7.3 |
Sales and marketing | 33.1 | 16.1 | 62.2 | 35.3 |
Technology development | 14 | 4.2 | 21.1 | 7.7 |
General and administrative | 15.8 | 5.8 | 29.9 | 24 |
Total expense | 81.1 | 50.6 | 152.7 | 113 |
Loss before income taxes | (52.9) | (20.7) | (101) | (56.9) |
Income tax expense | 2.7 | 0.3 | 3.6 | 0.6 |
Net loss | (55.6) | (21) | (104.6) | (57.5) |
Other comprehensive income, net of tax | ||||
Unrealized (loss) gain on investments | (0.2) | 0.2 | (0.1) | 0.2 |
Foreign currency translation adjustment | 0.3 | 0 | 1 | 0 |
Comprehensive loss | $ (55.5) | $ (20.8) | $ (103.7) | $ (57.3) |
Earnings Per Share [Abstract] | ||||
Net loss per share attributable to common stockholders—basic (usd per share) | $ (0.90) | $ (1.77) | $ (1.72) | $ (4.89) |
Net loss per share attributable to common stockholders—diluted (usd per share) | $ (0.90) | $ (1.77) | $ (1.72) | $ (4.89) |
Weighted average common shares outstanding—basic (shares) | 61,444,958 | 11,891,979 | 60,643,764 | 11,750,198 |
Weighted average common shares outstanding—diluted (shares) | 61,444,958 | 11,891,979 | 60,643,764 | 11,750,198 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income |
Beginning balance (shares) at Dec. 31, 2019 | 31,557,107 | ||||
Beginning balance at Dec. 31, 2019 | $ 480.2 | ||||
Ending balance (shares) at Mar. 31, 2020 | 31,557,107 | ||||
Ending balance at Mar. 31, 2020 | $ 480.2 | ||||
Beginning balance (shares) at Dec. 31, 2019 | 11,271,228 | ||||
Beginning balance at Dec. 31, 2019 | (182.5) | $ 0 | $ 15.7 | $ (198.3) | $ 0.1 |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||
Exercise of stock options (shares) | 54,374 | ||||
Stock-based compensation | 2.2 | 2.2 | |||
Contribution to the Lemonade Foundation (shares) | 500,000 | ||||
Contribution to the Lemonade Foundation | 12.2 | 12.2 | |||
Net loss | (36.5) | (36.5) | |||
Ending balance (shares) at Mar. 31, 2020 | 11,825,602 | ||||
Ending balance at Mar. 31, 2020 | $ (204.6) | $ 0 | 30.1 | (234.8) | 0.1 |
Beginning balance (shares) at Dec. 31, 2019 | 31,557,107 | ||||
Beginning balance at Dec. 31, 2019 | $ 480.2 | ||||
Ending balance (shares) at Jun. 30, 2020 | 31,557,107 | ||||
Ending balance at Jun. 30, 2020 | $ 480.2 | ||||
Beginning balance (shares) at Dec. 31, 2019 | 11,271,228 | ||||
Beginning balance at Dec. 31, 2019 | (182.5) | $ 0 | 15.7 | (198.3) | 0.1 |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||
Net loss | (57.5) | ||||
Ending balance (shares) at Jun. 30, 2020 | 12,369,701 | ||||
Ending balance at Jun. 30, 2020 | $ (221.6) | $ 0 | 33.9 | (255.8) | 0.3 |
Beginning balance (shares) at Mar. 31, 2020 | 31,557,107 | ||||
Beginning balance at Mar. 31, 2020 | $ 480.2 | ||||
Ending balance (shares) at Jun. 30, 2020 | 31,557,107 | ||||
Ending balance at Jun. 30, 2020 | $ 480.2 | ||||
Beginning balance (shares) at Mar. 31, 2020 | 11,825,602 | ||||
Beginning balance at Mar. 31, 2020 | (204.6) | $ 0 | 30.1 | (234.8) | 0.1 |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||
Exercise of stock options | 0.1 | 0.1 | |||
Exercise of stock options (shares) | 30,562 | ||||
Stock-based compensation | $ 2.4 | 2.4 | |||
Release of shares upon repayment (shares) | 513,537 | ||||
Release of shares upon repayment | $ 1.3 | 1.3 | |||
Net loss | (21) | (21) | |||
Other comprehensive income | 0.2 | 0.2 | |||
Ending balance (shares) at Jun. 30, 2020 | 12,369,701 | ||||
Ending balance at Jun. 30, 2020 | $ (221.6) | $ 0 | 33.9 | (255.8) | 0.3 |
Beginning balance (shares) at Dec. 31, 2020 | 0 | ||||
Beginning balance at Dec. 31, 2020 | $ 0 | ||||
Ending balance (shares) at Mar. 31, 2021 | 0 | ||||
Ending balance at Mar. 31, 2021 | $ 0 | ||||
Beginning balance (shares) at Dec. 31, 2020 | 56,774,294 | 56,774,294 | |||
Beginning balance at Dec. 31, 2020 | $ 541 | $ 0 | 859.8 | (320.6) | 1.8 |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||
Issuance of common stock upon closing of Follow-On Offering (shares) | 4,018,647 | ||||
Issuance of common stock upon closing of Follow-on Offering, net of underwriting discounts and commissions and offering costs of $22.8 million | 640.3 | 640.3 | |||
Exercise of stock options | 6.1 | 6.1 | |||
Exercise of stock options (shares) | 577,162 | ||||
Stock-based compensation | 6.1 | 6.1 | |||
Net loss | (49) | (49) | |||
Other comprehensive income | (0.8) | (0.8) | |||
Ending balance (shares) at Mar. 31, 2021 | 61,370,103 | ||||
Ending balance at Mar. 31, 2021 | $ 1,143.7 | $ 0 | 1,512.3 | (369.6) | 1 |
Beginning balance (shares) at Dec. 31, 2020 | 0 | ||||
Beginning balance at Dec. 31, 2020 | $ 0 | ||||
Ending balance (shares) at Jun. 30, 2021 | 0 | ||||
Ending balance at Jun. 30, 2021 | $ 0 | ||||
Beginning balance (shares) at Dec. 31, 2020 | 56,774,294 | 56,774,294 | |||
Beginning balance at Dec. 31, 2020 | $ 541 | $ 0 | 859.8 | (320.6) | 1.8 |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||
Exercise of stock options (shares) | 739,186 | ||||
Net loss | $ (104.6) | ||||
Ending balance (shares) at Jun. 30, 2021 | 61,532,127 | 61,532,127 | |||
Ending balance at Jun. 30, 2021 | $ 1,101.6 | $ 0 | 1,525.9 | (425.2) | 0.9 |
Beginning balance (shares) at Mar. 31, 2021 | 0 | ||||
Beginning balance at Mar. 31, 2021 | $ 0 | ||||
Ending balance (shares) at Jun. 30, 2021 | 0 | ||||
Ending balance at Jun. 30, 2021 | $ 0 | ||||
Beginning balance (shares) at Mar. 31, 2021 | 61,370,103 | ||||
Beginning balance at Mar. 31, 2021 | 1,143.7 | $ 0 | 1,512.3 | (369.6) | 1 |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||
Exercise of stock options | 1.7 | 1.7 | |||
Exercise of stock options (shares) | 162,024 | ||||
Stock-based compensation | 11.9 | 11.9 | |||
Net loss | (55.6) | (55.6) | |||
Other comprehensive income | $ (0.1) | (0.1) | |||
Ending balance (shares) at Jun. 30, 2021 | 61,532,127 | 61,532,127 | |||
Ending balance at Jun. 30, 2021 | $ 1,101.6 | $ 0 | $ 1,525.9 | $ (425.2) | $ 0.9 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) (Parenthetical) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Issuance costs and underwriting fees | $ 22.8 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (104.6) | $ (57.5) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 1.7 | 0.7 |
Stock-based compensation | 18 | 4.6 |
Amortization of discount on bonds | 0 | (0.3) |
Provision for bad debts | 2.3 | 0.9 |
Common shares contribution to the Lemonade Foundation | 0 | 12.2 |
Changes in operating assets and liabilities: | ||
Premium receivable | (24.4) | (11.6) |
Reinsurance recoverable | (15.7) | (5.9) |
Prepaid reinsurance premium | (29) | 1 |
Deferred acquisition costs | (1.4) | (0.7) |
Other assets | (1.5) | (3.5) |
Unpaid loss and loss adjustment expense | 18.4 | 7.1 |
Unearned premium | 42.2 | 18.9 |
Trade payables | (0.1) | 0.1 |
Funds held for reinsurance treaties | 15.5 | 0 |
Deferred ceding commissions | 7.7 | 0 |
Ceded premium payable | 5 | 1.6 |
Other liabilities and accrued expenses | 9.4 | (2.9) |
Net cash used in operating activities | (56.5) | (35.3) |
Cash flows from investing activities: | ||
Proceeds from short-term investments sold or matured | 0 | 40 |
Proceeds from bonds sold or matured | 0 | 2.2 |
Cost of short-term investments acquired | 0 | (14.9) |
Cost of bonds acquired | (64.6) | (2.9) |
Purchases of property and equipment | (4.7) | (1.9) |
Net cash (used in) provided by investing activities | (69.3) | 22.5 |
Cash flows from financing activities: | ||
Proceeds from Follow-on Offering, net of underwriting discounts and commissions and offering costs | 640.3 | 0 |
Proceeds from release of shares upon repayment | 0 | 1.3 |
Proceeds from stock exercises | 7.8 | 0.1 |
Net cash provided by financing activities | 648.1 | 1.4 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1) | (0.1) |
Net increase in cash, cash equivalents and restricted cash | 521.3 | (11.5) |
Cash, cash equivalents and restricted cash at beginning of period | 571.4 | 270.3 |
Cash, cash equivalents and restricted cash at end of period | 1,092.7 | 258.8 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | $ 1.1 | $ 0.8 |
Nature of the Business
Nature of the Business | 6 Months Ended |
Jun. 30, 2021 | |
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, 2020 as contained in the Company's Annual Report on Form 10-K for the year ending December 31, 2020 (the "Annual Report on Form 10-K") for more complete descriptions and discussions. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2021 | |
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 global pandemic resulting from the disease known as COVID-19, caused by a novel strain of coronavirus, SARS-CoV-2, has caused national and global economic and financial market disruptions and may adversely impact our business. Although the Company did not see a material impact on its results of operations for the three and six months ended June 30, 2021 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 |
Use of Estimates
Use of Estimates | 6 Months Ended |
Jun. 30, 2021 | |
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 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, valuation allowance on deferred tax assets and valuation on stock-based compensation prior to the Company's IPO. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, 2021 and December 31, 2020 ($ in millions): June 30, December 31, 2021 2020 Cash and cash equivalents $ 1,092.4 $ 570.8 Restricted cash 0.3 0.6 Total cash, cash equivalents and restricted cash $ 1,092.7 $ 571.4 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 relates to security deposits for office leases in Israel. The carrying value of restricted cash approximates fair value. Deferred offering costs The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction to the carrying value of stockholders' equity (deficit) as a reduction of additional paid-in capital generated as a result of such offering. In connection with the Initial Public Offering, the Company incurred total offering costs of $32.4 million, of which $28.9 million was recorded as a reduction to gross proceeds, and $3.5 million was recognized as a component of general and administrative expense in 2019. On January 14, 2021, the Company completed a Follow-on Offering of common stock, as defined and discussed in detail in Note 9, which generated net proceeds of $525.7 million, after deducting underwriting discounts and offering costs. On February 1, 2021, the underwriters exercised their option to purchase additional shares, and generated additional net proceeds to us of $114.6 million. Deferred offering costs from the Follow-on Offering amounted to $0.4 million. Recent accounting pronouncements The Company currently qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Accordingly, the Company is provided the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. The Company has elected to adopt new or revised accounting guidance within the same time period as private companies, unless, as indicated below, management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance. ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, simplifies the various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifies and amends the existing guidance to improve consistent application. The adoption of ASU 2019-12 beginning January 1, 2021 did not have a material impact on our condensed consolidated financial statement and related disclosures. In February 2016, the FASB issued Leases (Topic 842) (“ASU 2016-02”), whereby a lessee will be required to recognize for all leases at the commencement date a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. A modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements must be applied. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. ASU 2016-02 is effective for the Company’s annual periods beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The adoption of the new standard is expected to result in the recognition of additional lease liabilities and right-of-use assets as of January 1, 2022. The Company is evaluating the potential impact of this pronouncement. In June 2016, the FASB issued Financial Instruments — Credit Losses, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 will change the way entities recognize impairment of financial assets by requiring immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, including, among others, held-to-maturity debt securities, premium receivables, and reinsurance recoverable. The valuation allowance is a measurement of expected losses that is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This methodology is referred to as the current expected credit loss model. ASU 2016-13 requires a valuation allowance to be calculated on these financial assets, as well as available for sale securities, and that they be presented on the financial statements net of the valuation allowance. ASU 2016-13 is effective for the Company’s annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2016-13 on its financial condition and results of operations, with a primary focus on its reinsurance recoverable. Reclassification Certain accounts in the prior period financial statements were reclassified to conform with the current period presentation. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Unrealized gains and losses The following tables present cost or amortized cost and fair values of investments as of June 30, 2021 and December 31, 2020 ($ in millions): Cost or Amortized Cost Gross Fair Gains Losses June 30, 2021 U.S. Government obligations $ 71.3 $ 0.1 $ (0.2) $ 71.2 Total $ 71.3 $ 0.1 $ (0.2) $ 71.2 December 31, 2020 U.S. Government obligations $ 6.4 $ 0.2 $ — $ 6.6 Total $ 6.4 $ 0.2 $ — $ 6.6 Gross unrealized losses amounted to $0.2 million as of June 30, 2021. Gross unrealized losses were less than $0.1 million as of December 31, 2020. Gross unrealized gains and losses were recorded as a component of accumulated other comprehensive income. Contractual maturities of bonds The following table presents the cost or amortized cost and estimated fair value of bonds as of June 30, 2021 by contractual maturity ($ 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. June 30, 2021 Cost or Fair Value Due in one year or less $ 1.1 $ 1.1 Due after one year through five years 70.2 70.1 Due after five years through ten years — — Due after ten years — — Total $ 71.3 $ 71.2 Net investment income An analysis of net investment income follows ($ in millions): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Interest on cash and cash equivalents $ 0.1 $ 0.1 $ 0.3 $ 0.8 Bonds 0.1 — 0.1 — Short-term investments — 0.1 — 0.3 Total net investment income $ 0.2 $ 0.2 $ 0.4 $ 1.1 Investment gains and losses The Company did not have any pre-tax net realized capital gains or losses for the three and six months ended June 30, 2021 and 2020. Aging of gross unrealized losses The following table presents the gross unrealized losses and related fair values for the Company’s available-for-sale bond securities, grouped by duration of time in a continuous unrealized loss position as of June 30, 2021 and December 31, 2020 ($ in millions): Less than 12 Months 12 Months or More Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses June 30, 2021 U.S. Government obligations $ — $ (0.2) $ — $ — $ — $ (0.2) Total $ — $ (0.2) $ — $ — $ — $ (0.2) Less than 12 Months 12 Months or More Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses December 31, 2020 U.S. Government obligations $ — $ — $ — $ — $ — $ — Total $ — $ — $ — $ — $ — $ — There were no investments in gross unrealized loss position for twelve months or more as of June 30, 2021. Gross unrealized losses for U.S. Government Bonds was less than $0.1 million for twelve months or more as of December 31, 2020. The gross unrealized investment losses as of June 30, 2021 and December 31, 2020, were deemed to be temporary, based on, among other things: • the duration of time and the relative magnitude to which fair values of these investments have been below their amortized cost was not indicative of an other than temporary impairment loss; • the absence of compelling evidence that would cause the Company to call into question the financial condition or near-term prospects of the issuer of the investment; and • the Company’s ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery. The Company may ultimately record a realized loss after having originally concluded that the decline in value was temporary. Risks and uncertainties are inherent in the methodology the Company uses to assess other-than-temporary declines in value. Risks and uncertainties could include, but are not limited to, incorrect assumptions about financial condition, liquidity or future prospects, inadequacy of any underlying collateral, and unfavorable changes in economic conditions or social trends, interest rates or credit ratings. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following tables present the Company’s fair value hierarchy for financial assets and liabilities measured as of June 30, 2021 and December 31, 2020 ($ in millions): June 30, 2021 Level 1 Level 2 Level 3 Total Assets: U.S. Government obligations $ — $ 71.2 $ — $ 71.2 Total $ — $ 71.2 $ — $ 71.2 December 31, 2020 Level 1 Level 2 Level 3 Total Assets: U.S. Government obligations $ — $ 6.6 $ — $ 6.6 Total $ — $ 6.6 $ — $ 6.6 There were no transfers between Level 1, Level 2, or Level 3 during the three and six months ended June 30, 2021 and December 31, 2020, respectively. |
Unpaid Loss and Loss Adjustment
Unpaid Loss and Loss Adjustment Expense | 6 Months Ended |
Jun. 30, 2021 | |
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 six months ended June 30, 2021 and 2020 ($ in millions): Six Months Ended June 30, 2021 2020 Unpaid loss and LAE at beginning of period $ 46.3 $ 28.2 Less: Reinsurance recoverable at beginning of period (1) 36.3 18.5 Net unpaid loss and LAE at beginning of period 10.0 9.7 Add: Incurred loss and LAE, net of reinsurance, related to: Current year 29.9 33.5 Prior years (0.4) 5.2 Total incurred 29.5 38.7 Deduct: Paid loss and LAE, net of reinsurance, related to: Current year 19.0 24.4 Prior years 5.5 13.2 Total paid 24.5 37.6 Unpaid loss and LAE, net of reinsurance recoverable, at end of period 15.0 10.8 Reinsurance recoverable at end of period (1) 49.7 24.5 Unpaid loss and LAE, gross of reinsurance recoverable, at end of period $ 64.7 $ 35.3 (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. The Company had unfavorable development on net loss and LAE reserves of $0.4 million for the six months ended June 30, 2021, and favorable development on net loss and LAE reserves of $5.2 million for the six months ended June 30, 2020. No additional premiums or returned premiums have been accrued as a result of prior year effects. For the six months ended June 30, 2021, current accident year incurred loss and LAE included $6.2 million of net incurred loss and LAE from the severe winter storm that affected our customers in the states of Texas and Oklahoma. The net incurred loss and LAE from Winter Storm Uri as of June 30, 2021 represents the Company's best estimates based upon information currently available. Through June 30, 2021, the Company has proportional reinsurance contracts which cover all of the Company's products and geographies, and transfer, or “cede,” 75% of the premium to reinsurers ("Proportional Reinsurance Contracts"). In exchange, these reinsurers pay a ceding commission of 25% for every dollar ceded, in addition to funding all of the corresponding claims, or 75% of all claims. The Company opted to manage the remaining 25% of the business with alternative forms of reinsurance through non-proportional reinsurance contracts ("Non-Proportional Reinsurance Contracts"). The majority of the Proportional Reinsurance Contracts run for a three-year term, expiring June 30, 2023 , while the remainder has a one-year term, expiring June 30, 2021 . The Company's Non-Proportional Reinsurance Contracts are likewise effective as of July 1, 2020, and have a one-year term. |
Other Liabilities and Accrued E
Other Liabilities and Accrued Expenses | 6 Months Ended |
Jun. 30, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities and Accrued Expenses | Other Liabilities and Accrued Expenses Other liabilities and accrued expenses as of June 30, 2021 and December 31, 2020 consist of the following ($ in millions): June 30, December 31, 2021 2020 Accrued advertising costs $ 10.3 $ 6.8 Employee compensation payable 3.8 3.7 Premium taxes payable 3.0 3.2 Income tax payable 2.6 0.3 Advance premium 2.5 — Accrued professional fees 2.4 2.6 VAT payable 0.2 0.2 Other payables 3.2 1.9 Total other liabilities and accrued expenses $ 28.0 $ 18.7 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common stock The Company completed its IPO on July 2, 2020, in which the Company issued and sold 12,650,000 shares of its common stock at a public offering price of $29 per share, including 1,650,000 shares sold upon the exercise of the underwriter's option to purchase additional shares. After underwriter discounts and commissions and other offering costs, net proceeds from the IPO were approximately $335.6 million. In connection with the IPO, the Company's outstanding convertible preferred stock converted into 31,557,107 shares of common stock. Upon conversion of the convertible preferred stock, the Company reclassified the carrying value of the preferred stock to common stock and additional paid in capital. Upon closing of the IPO, 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. On January 14, 2021, the Company completed a Follow-on Offering of common stock (the "Follow-on Offering"), 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 us of $525.7 million after deducting underwriting discounts and commissions and other offering costs. On February 1, 2021, 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 us after deducting underwriting discounts . As of both June 30, 2021 and December 31, 2020, 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. On February 18, 2020, the Company made a contribution of 500,000 newly issued shares of common stock to a related party, the Lemonade Foundation (see Note 13). 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 June 30, 2021 and December 31, 2020, 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 June 30, 2021 and December 31, 2020, there were no shares of undesignated preferred stock issued or outstanding. |
Stock-based Compensation
Stock-based Compensation | 6 Months Ended |
Jun. 30, 2021 | |
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, 2021, the 2020 Plan was increased by 2,838,412 shares, equal to 5% of the aggregate number of outstanding common stock as of December 31, 2020. As of June 30, 2021, there were 5,890,700 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 annually 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, 2021, the 2020 ESPP was increased by 567,682 shares, equal to 1% of the aggregate number of outstanding common stock as of December 31, 2020. As of June 30, 2021, 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 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 June 30, 2021, there wer e 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. Options granted to employees and non-employees The fair value of each option granted for the six months ended June 30, 2021 and 2020 is estimated on the date of grant using the Black-Scholes model based on the following assumptions: Six Months Ended June 30, 2021 2020 Weighted average expected term (years) 6.3 6.1 Risk-free interest rate 1.3% 1.0% Volatility 49% 40% Expected dividend yield 0% 0% Expected volatility is based on companies at a comparable stage, as well as companies in the same or a similar industry. 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 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 Weighted- Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding as of December 31, 2020 4,944,711 $ 20.50 8.30 $ 506.58 Granted 2,052,325 102.81 Exercised (739,186) 10.56 Cancelled (223,241) 39.21 Outstanding as of June 30, 2021 6,034,609 $ 48.65 8.51 $ 382.66 Options exercisable as of June 30, 2021 1,720,686 $ 13.51 7.20 $ 165.22 Options unvested as of June 30, 2021 4,313,923 $ 62.65 9.03 $ 217.44 Restricted Stock Units Number of shares Grant Date Outstanding as of December 31, 2020 — $ — Granted 57,004 151.58 Vested — — Cancelled (1,875) 159.02 Outstanding as of June 30, 2021 55,129 $ 151.33 . Stock-based compensation expense Stock-based compensation expense from stock options and RSUs granted included and classified in the condensed consolidated statements of operations for the six months ended June 30, 2021 and 2020 is as follows ($ in millions): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Loss and loss adjustment expense, net $ 0.5 $ 0.1 $ 0.7 $ 0.1 Other insurance expense 0.2 0.2 0.4 0.4 Sales and marketing 1.3 0.6 2.4 1.3 Technology development 6.8 0.7 7.5 1.3 General and administrative 3.1 0.8 7.0 1.5 Total stock-based compensation expense $ 11.9 $ 2.4 $ 18.0 $ 4.6 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 June 30, Six Months Ended June 30, 2021 2020 2021 2020 Stock options $ 10.5 $ 2.4 $ 16.0 $ 4.6 RSUs 1.4 — 2.0 — Total stock-based compensation expense $ 11.9 $ 2.4 $ 18.0 $ 4.6 The total unrecognized expense granted to employees and non-employees outstanding at June 30, 2021 was $108.2 million for the stock options and $6.4 million for the RSUs, with a remaining weighted-average vesting period of 1.5 years for the stock options and 1.5 years for the RSUs. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Effective tax rates The consolidated effective tax rate for the six months ended June 30, 2021 and 2020 was (3.6)% and (1.0)%, respectively. The change in effective tax rate over the two periods was predominantly reflective of the change in profit before tax of its wholly-owned subsidiaries in Israel and the Netherlands. The Company believes that as of June 30, 2021, it had no material uncertain tax positions. Interest and penalties related to unrecognized tax expenses (benefits) are recognized in income tax expense, when applicable. There were no material liabilities for interest and penalties accrued as of June 30, 2021. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss per Share Net loss per share Basic and diluted net loss per share attributable to common stockholders was calculated as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Numerator: Net loss attributable to common stockholders ($ in millions) $ (55.6) $ (21.0) $ (104.6) $ (57.5) Denominator: Weighted average common shares outstanding — basic and diluted 61,444,958 11,891,979 60,643,764 11,750,198 Net loss per share attributable to common stockholders — basic and diluted $ (0.90) $ (1.77) $ (1.72) $ (4.89) The Company’s potentially dilutive securities, which include stock options, unvested RSUs and preferred stock, 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 unvested RSUs and outstanding options to purchase common stock of 6,089,738 and 4,578,520 for the six months ended June 30, 2021 and 2020, respectively, 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. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2021 | |
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 less than $0.1 million of travel related expenses during the three and six months ended June 30, 2021, and less than $0.1 million of travel related expenses was incurred during the three and six months ended June 30, 2020. The Company has historically leased office spaces in the United States and The Netherlands from an affiliate. Rental expense amounted to less than $0.1 million was incurred for the three and six months ended June 30, 2021, and less than $0.1 million for the three and six months ended June 30, 2020. There were no outstanding amounts due to or from related parties as of June 30, 2021 and December 31, 2020. The Company’s Chief Executive Officer and the Company’s President and Chief Operating Officer, 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. Effective July 2021, the Company's President and Chief Operating Officer became the Company's Co-Chief Executive Officer. The Company contributed 500,000 shares of common stock with a fair market value of $24.36 per share (see Note 9). The Company recorded $12.2 million of non-cash expense within general and administrative expense in connection with this contribution for the year ended December 31, 2020. In connection with the Follow-on Offering as discussed in Note 9, Lemonade Foundation sold 100,000 shares of the contributed shares of the Company. As of June 30, 2021, there were no outstanding amounts due to or from the Lemonade Foundation. |
Commitment and Contingent Liabi
Commitment and Contingent Liabilities | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and Contingent Liabilities | Commitments and Contingent Liabilities Litigation The Company is occasionally a party to routine claims or litigation incidental to its business. The Company does not believe that it is a party to any pending legal proceeding that is likely to have a material adverse effect on its business, financial condition or results of operations. Lease commitments The Company and its subsidiaries lease their facilities under various operating lease agreements. The Company’s headquarters in New York is under a lease that expires in November 2022. The Company’s Israel based operations occupy offices with lease expiration dates that extend through July 2026. On March 18, 2019, the Company entered into a lease agreement to lease office space in Scottsdale, Arizona that expires in November 2024. Aggregate minimum rental commitments under non-cancelable leases at June 30, 2021 are as follows ($ in millions): 2021 (remaining six months) $ 2.6 2022 4.9 2023 2.8 2024 2.8 2025 and thereafter 4.1 $ 17.2 Expenses for lease of facilities for the three and six months ended June 30, 2021 were $1.1 million and $2.1 million, respectively, and for the three and six months ended June 30, 2020 were $1.0 million and $1.9 million, respectively, and are included in general and administrative expenses in the consolidated statements of operations and comprehensive loss. Charges and guarantees The Company provided guarantees with respect to office leases in an aggregate amount of $0.3 million as of June 30, 2021 and $0.6 million as of December 31, 2020. |
Geographical Breakdown of Gross
Geographical Breakdown of Gross Written Premium | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Geographical Breakdown of Gross Written Premium | Geographical Breakdown of Gross Written Premium The Company has a single reportable segment and offers insurance coverage under the homeowners multi-peril and inland marine lines of business. Gross written premium by jurisdiction are as follows ($ in millions): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Jurisdiction Amount % of GWP Amount % of GWP Amount % of GWP Amount % of GWP California $ 22.2 24.8 % $ 9.9 21.2 % $ 41.4 25.0 % $ 19.3 22.8 % Texas 18.7 20.9 % 11.8 25.3 % 33.7 20.4 % 20.6 24.3 % New York 10.9 12.2 % 5.3 11.3 % 20.9 12.6 % 10.2 12.0 % Georgia 4.3 4.8 % 2.8 6.0 % 8.0 4.8 % 4.9 5.8 % Illinois 4.1 4.6 % 2.6 5.6 % 7.1 4.3 % 4.2 5.0 % New Jersey 3.7 4.1 % 1.6 3.4 % 6.8 4.1 % 3.1 3.7 % Pennsylvania 2.3 2.6 % 1.1 2.4 % 4.1 2.5 % 1.8 2.1 % Michigan 1.9 2.1 % 1.4 3.0 % 3.5 2.1 % 2.4 2.8 % Colorado 2.0 2.2 % 0.8 1.7 % 3.4 2.1 % 1.5 1.8 % Maryland 1.8 2.0 % 0.9 1.9 % 3.4 2.1 % 1.7 2.0 % All other 17.6 19.7 % 8.5 18.2 % 33.0 20.0 % 15.1 17.7 % $ 89.5 100.0 % $ 46.7 100.0 % $ 165.3 100.0 % $ 84.8 100.0 % |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
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 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, valuation allowance on deferred tax assets and valuation on stock-based compensation prior to the Company's 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 relates to security deposits for office leases in Israel. The carrying value of restricted cash approximates fair value. |
Deferred offering costs | The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction to the carrying value of stockholders' equity (deficit) as a reduction of additional paid-in capital generated as a result of such offering. In connection with the Initial Public Offering, the Company incurred total offering costs of $32.4 million, of which $28.9 million was recorded as a reduction to gross proceeds, and $3.5 million was recognized as a component of general and administrative expense in 2019. On January 14, 2021, the Company completed a Follow-on Offering of common stock, as defined and discussed in detail in Note 9, which generated net proceeds of $525.7 million, after deducting underwriting discounts and offering costs. On February 1, 2021, the underwriters exercised their option to purchase additional shares, and generated additional net proceeds to us of $114.6 million. Deferred offering costs from the Follow-on Offering amounted to $0.4 million. |
Recent accounting pronouncements | The Company currently qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Accordingly, the Company is provided the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. The Company has elected to adopt new or revised accounting guidance within the same time period as private companies, unless, as indicated below, management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance. ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, simplifies the various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifies and amends the existing guidance to improve consistent application. The adoption of ASU 2019-12 beginning January 1, 2021 did not have a material impact on our condensed consolidated financial statement and related disclosures. In February 2016, the FASB issued Leases (Topic 842) (“ASU 2016-02”), whereby a lessee will be required to recognize for all leases at the commencement date a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. A modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements must be applied. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. ASU 2016-02 is effective for the Company’s annual periods beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The adoption of the new standard is expected to result in the recognition of additional lease liabilities and right-of-use assets as of January 1, 2022. The Company is evaluating the potential impact of this pronouncement. In June 2016, the FASB issued Financial Instruments — Credit Losses, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 will change the way entities recognize impairment of financial assets by requiring immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, including, among others, held-to-maturity debt securities, premium receivables, and reinsurance recoverable. The valuation allowance is a measurement of expected losses that is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This methodology is referred to as the current expected credit loss model. ASU 2016-13 requires a valuation allowance to be calculated on these financial assets, as well as available for sale securities, and that they be presented on the financial statements net of the valuation allowance. ASU 2016-13 is effective for the Company’s annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2016-13 on its financial condition and results of operations, with a primary focus on its reinsurance recoverable. |
Reclassification | Certain accounts in the prior period financial statements were reclassified to conform with the current period presentation. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Cash and cash equivalents | The following represents the Company’s cash, cash equivalents and restricted cash as of June 30, 2021 and December 31, 2020 ($ in millions): June 30, December 31, 2021 2020 Cash and cash equivalents $ 1,092.4 $ 570.8 Restricted cash 0.3 0.6 Total cash, cash equivalents and restricted cash $ 1,092.7 $ 571.4 |
Restricted cash | The following represents the Company’s cash, cash equivalents and restricted cash as of June 30, 2021 and December 31, 2020 ($ in millions): June 30, December 31, 2021 2020 Cash and cash equivalents $ 1,092.4 $ 570.8 Restricted cash 0.3 0.6 Total cash, cash equivalents and restricted cash $ 1,092.7 $ 571.4 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Amortized cost and fair values | The following tables present cost or amortized cost and fair values of investments as of June 30, 2021 and December 31, 2020 ($ in millions): Cost or Amortized Cost Gross Fair Gains Losses June 30, 2021 U.S. Government obligations $ 71.3 $ 0.1 $ (0.2) $ 71.2 Total $ 71.3 $ 0.1 $ (0.2) $ 71.2 December 31, 2020 U.S. Government obligations $ 6.4 $ 0.2 $ — $ 6.6 Total $ 6.4 $ 0.2 $ — $ 6.6 |
Contractual maturities of bonds | The following table presents the cost or amortized cost and estimated fair value of bonds as of June 30, 2021 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. June 30, 2021 Cost or Fair Value Due in one year or less $ 1.1 $ 1.1 Due after one year through five years 70.2 70.1 Due after five years through ten years — — Due after ten years — — Total $ 71.3 $ 71.2 |
Net investment income | An analysis of net investment income follows ($ in millions): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Interest on cash and cash equivalents $ 0.1 $ 0.1 $ 0.3 $ 0.8 Bonds 0.1 — 0.1 — Short-term investments — 0.1 — 0.3 Total net investment income $ 0.2 $ 0.2 $ 0.4 $ 1.1 |
Aging of gross unrealized losses | The following table presents the gross unrealized losses and related fair values for the Company’s available-for-sale bond securities, grouped by duration of time in a continuous unrealized loss position as of June 30, 2021 and December 31, 2020 ($ in millions): Less than 12 Months 12 Months or More Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses June 30, 2021 U.S. Government obligations $ — $ (0.2) $ — $ — $ — $ (0.2) Total $ — $ (0.2) $ — $ — $ — $ (0.2) Less than 12 Months 12 Months or More Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses December 31, 2020 U.S. Government obligations $ — $ — $ — $ — $ — $ — Total $ — $ — $ — $ — $ — $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
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 June 30, 2021 and December 31, 2020 ($ in millions): June 30, 2021 Level 1 Level 2 Level 3 Total Assets: U.S. Government obligations $ — $ 71.2 $ — $ 71.2 Total $ — $ 71.2 $ — $ 71.2 December 31, 2020 Level 1 Level 2 Level 3 Total Assets: U.S. Government obligations $ — $ 6.6 $ — $ 6.6 Total $ — $ 6.6 $ — $ 6.6 |
Unpaid Loss and Loss Adjustme_2
Unpaid Loss and Loss Adjustment Expense (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 six months ended June 30, 2021 and 2020 ($ in millions): Six Months Ended June 30, 2021 2020 Unpaid loss and LAE at beginning of period $ 46.3 $ 28.2 Less: Reinsurance recoverable at beginning of period (1) 36.3 18.5 Net unpaid loss and LAE at beginning of period 10.0 9.7 Add: Incurred loss and LAE, net of reinsurance, related to: Current year 29.9 33.5 Prior years (0.4) 5.2 Total incurred 29.5 38.7 Deduct: Paid loss and LAE, net of reinsurance, related to: Current year 19.0 24.4 Prior years 5.5 13.2 Total paid 24.5 37.6 Unpaid loss and LAE, net of reinsurance recoverable, at end of period 15.0 10.8 Reinsurance recoverable at end of period (1) 49.7 24.5 Unpaid loss and LAE, gross of reinsurance recoverable, at end of period $ 64.7 $ 35.3 (1) Reinsurance recoverable in this table includes only ceded unpaid loss and LAE |
Other Liabilities and Accrued_2
Other Liabilities and Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Other liabilities and accrued expenses | Other liabilities and accrued expenses as of June 30, 2021 and December 31, 2020 consist of the following ($ in millions): June 30, December 31, 2021 2020 Accrued advertising costs $ 10.3 $ 6.8 Employee compensation payable 3.8 3.7 Premium taxes payable 3.0 3.2 Income tax payable 2.6 0.3 Advance premium 2.5 — Accrued professional fees 2.4 2.6 VAT payable 0.2 0.2 Other payables 3.2 1.9 Total other liabilities and accrued expenses $ 28.0 $ 18.7 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Fair value assumptions | The fair value of each option granted for the six months ended June 30, 2021 and 2020 is estimated on the date of grant using the Black-Scholes model based on the following assumptions: Six Months Ended June 30, 2021 2020 Weighted average expected term (years) 6.3 6.1 Risk-free interest rate 1.3% 1.0% Volatility 49% 40% Expected dividend yield 0% 0% |
Stock options activity | Stock options Number of Weighted- Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding as of December 31, 2020 4,944,711 $ 20.50 8.30 $ 506.58 Granted 2,052,325 102.81 Exercised (739,186) 10.56 Cancelled (223,241) 39.21 Outstanding as of June 30, 2021 6,034,609 $ 48.65 8.51 $ 382.66 Options exercisable as of June 30, 2021 1,720,686 $ 13.51 7.20 $ 165.22 Options unvested as of June 30, 2021 4,313,923 $ 62.65 9.03 $ 217.44 |
Restricted stock units activity | Restricted Stock Units Number of shares Grant Date Outstanding as of December 31, 2020 — $ — Granted 57,004 151.58 Vested — — Cancelled (1,875) 159.02 Outstanding as of June 30, 2021 55,129 $ 151.33 |
Stock-based compensation expense | Stock-based compensation expense from stock options and RSUs granted included and classified in the condensed consolidated statements of operations for the six months ended June 30, 2021 and 2020 is as follows ($ in millions): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Loss and loss adjustment expense, net $ 0.5 $ 0.1 $ 0.7 $ 0.1 Other insurance expense 0.2 0.2 0.4 0.4 Sales and marketing 1.3 0.6 2.4 1.3 Technology development 6.8 0.7 7.5 1.3 General and administrative 3.1 0.8 7.0 1.5 Total stock-based compensation expense $ 11.9 $ 2.4 $ 18.0 $ 4.6 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 June 30, Six Months Ended June 30, 2021 2020 2021 2020 Stock options $ 10.5 $ 2.4 $ 16.0 $ 4.6 RSUs 1.4 — 2.0 — Total stock-based compensation expense $ 11.9 $ 2.4 $ 18.0 $ 4.6 The total unrecognized expense granted to employees and non-employees outstanding at June 30, 2021 was $108.2 million for the stock options and $6.4 million for the RSUs, with a remaining weighted-average vesting period of 1.5 years for the stock options and 1.5 years for the RSUs. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Basic and diluted net loss per share | Basic and diluted net loss per share attributable to common stockholders was calculated as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Numerator: Net loss attributable to common stockholders ($ in millions) $ (55.6) $ (21.0) $ (104.6) $ (57.5) Denominator: Weighted average common shares outstanding — basic and diluted 61,444,958 11,891,979 60,643,764 11,750,198 Net loss per share attributable to common stockholders — basic and diluted $ (0.90) $ (1.77) $ (1.72) $ (4.89) |
Commitment and Contingent Lia_2
Commitment and Contingent Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Aggregate minimum rental commitments under non-cancelable leases | Aggregate minimum rental commitments under non-cancelable leases at June 30, 2021 are as follows ($ in millions): 2021 (remaining six months) $ 2.6 2022 4.9 2023 2.8 2024 2.8 2025 and thereafter 4.1 $ 17.2 |
Geographical Breakdown of Gro_2
Geographical Breakdown of Gross Written Premium (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Gross written premium by state | The Company has a single reportable segment and offers insurance coverage under the homeowners multi-peril and inland marine lines of business. Gross written premium by jurisdiction are as follows ($ in millions): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Jurisdiction Amount % of GWP Amount % of GWP Amount % of GWP Amount % of GWP California $ 22.2 24.8 % $ 9.9 21.2 % $ 41.4 25.0 % $ 19.3 22.8 % Texas 18.7 20.9 % 11.8 25.3 % 33.7 20.4 % 20.6 24.3 % New York 10.9 12.2 % 5.3 11.3 % 20.9 12.6 % 10.2 12.0 % Georgia 4.3 4.8 % 2.8 6.0 % 8.0 4.8 % 4.9 5.8 % Illinois 4.1 4.6 % 2.6 5.6 % 7.1 4.3 % 4.2 5.0 % New Jersey 3.7 4.1 % 1.6 3.4 % 6.8 4.1 % 3.1 3.7 % Pennsylvania 2.3 2.6 % 1.1 2.4 % 4.1 2.5 % 1.8 2.1 % Michigan 1.9 2.1 % 1.4 3.0 % 3.5 2.1 % 2.4 2.8 % Colorado 2.0 2.2 % 0.8 1.7 % 3.4 2.1 % 1.5 1.8 % Maryland 1.8 2.0 % 0.9 1.9 % 3.4 2.1 % 1.7 2.0 % All other 17.6 19.7 % 8.5 18.2 % 33.0 20.0 % 15.1 17.7 % $ 89.5 100.0 % $ 46.7 100.0 % $ 165.3 100.0 % $ 84.8 100.0 % |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | Feb. 01, 2021 | Jan. 14, 2021 | Jul. 02, 2020 | Dec. 31, 2019 | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 |
Accounting Policies [Abstract] | |||||||
Cash and cash equivalents | $ 1,092.4 | $ 570.8 | |||||
Restricted cash | 0.3 | 0.6 | |||||
Total cash, cash equivalents and restricted cash | $ 270.3 | $ 1,092.7 | $ 571.4 | $ 258.8 | |||
Sale of Stock [Line Items] | |||||||
Offering costs | $ 0.4 | $ 32.4 | |||||
Offering costs - component of gross proceeds | $ 28.9 | ||||||
Offering costs - component of expense | $ 3.5 | ||||||
Public Stock Offering | |||||||
Sale of Stock [Line Items] | |||||||
Net proceeds from sale | $ 525.7 | ||||||
Underwriter's option | |||||||
Sale of Stock [Line Items] | |||||||
Net proceeds from sale | $ 114.6 | $ 114.6 |
Investments - Amortized Cost an
Investments - Amortized Cost and Fair Values (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | $ 71.3 | $ 6.4 |
Gross Unrealized Gains | 0.1 | 0.2 |
Gross Unrealized Losses | 0.2 | 0 |
Fair Value | 71.2 | 6.6 |
U.S. Government obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 71.3 | 6.4 |
Gross Unrealized Gains | 0.1 | 0.2 |
Gross Unrealized Losses | 0.2 | 0 |
Fair Value | $ 71.2 | $ 6.6 |
Investments - Contractual Matur
Investments - Contractual Maturities of Bonds (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Cost or Amortized Cost | ||
Due in one year or less | $ 1.1 | |
Due after one year through five years | 70.2 | |
Due after five years through ten years | 0 | |
Due after ten years | 0 | |
Cost or Amortized Cost | 71.3 | $ 6.4 |
Fair Value | ||
Due in one year or less | 1.1 | |
Due after one year through five years | 70.1 | |
Due after five years through ten years | 0 | |
Due after ten years | 0 | |
Fair Value | $ 71.2 | $ 6.6 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Net Investment Income [Line Items] | ||||
Net investment income | $ 0.2 | $ 0.2 | $ 0.4 | $ 1.1 |
Interest on cash and cash equivalents | ||||
Net Investment Income [Line Items] | ||||
Net investment income | 0.1 | 0.1 | 0.3 | 0.8 |
Bonds | ||||
Net Investment Income [Line Items] | ||||
Net investment income | 0.1 | 0 | 0.1 | 0 |
Short-term investments | ||||
Net Investment Income [Line Items] | ||||
Net investment income | $ 0 | $ 0.1 | $ 0 | $ 0.3 |
Investments - Aging Of Gross Un
Investments - Aging Of Gross Unrealized Losses (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value | ||
Less than 12 Months | $ 0 | $ 0 |
12 Months or More | 0 | 0 |
Fair Value | 0 | 0 |
Gross Unrealized Losses | ||
Less than 12 Months | (0.2) | 0 |
12 Months or More | 0 | 0 |
Gross Unrealized Losses | (0.2) | 0 |
U.S. Government obligations | ||
Fair Value | ||
Less than 12 Months | 0 | 0 |
12 Months or More | 0 | 0 |
Fair Value | 0 | 0 |
Gross Unrealized Losses | ||
Less than 12 Months | (0.2) | 0 |
12 Months or More | 0 | 0 |
Gross Unrealized Losses | $ (0.2) | $ 0 |
Investments - Additional Inform
Investments - Additional Information (Details) $ in Millions | Jun. 30, 2021USD ($)security | Dec. 31, 2020USD ($)security |
Investments, Debt and Equity Securities [Abstract] | ||
Gross unrealized losses | $ 0.2 | $ 0 |
Gross unrealized losses, twelve months or more | $ 0 | $ 0 |
Number of debt securities held, unrealized loss position for 12 months or more | security | 0 | 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Government obligations | $ 71.2 | $ 6.6 |
Total | 71.2 | 6.6 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Government obligations | 0 | 0 |
Total | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Government obligations | 71.2 | 6.6 |
Total | 71.2 | 6.6 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Government obligations | 0 | 0 |
Total | $ 0 | $ 0 |
Unpaid Loss and Loss Adjustme_3
Unpaid Loss and Loss Adjustment Expense (Details) - USD ($) $ in Millions | Jul. 01, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||||
Unpaid loss and LAE at beginning of period | $ 64.7 | $ 46.3 | $ 28.2 | ||
Less: Reinsurance recoverable at beginning of period | 49.7 | 36.3 | 18.5 | ||
Net unpaid loss and LAE at beginning of period | $ 15 | 10 | 9.7 | ||
Add: Incurred loss and LAE, net of reinsurance, related to: | |||||
Current year | 29.9 | 33.5 | |||
Prior years | (0.4) | 5.2 | |||
Total incurred | $ 13 | $ 20.5 | 29.5 | 38.7 | |
Deduct: Paid loss and LAE, net of reinsurance, related to: | |||||
Current year | 19 | 24.4 | |||
Prior years | 5.5 | 13.2 | |||
Total paid | 24.5 | 37.6 | |||
Unpaid loss and LAE, gross of reinsurance recoverable, at end of period | 15 | 10.8 | 15 | 10.8 | |
Reinsurance recoverable at end of period | 49.7 | 24.5 | 49.7 | 24.5 | |
Unpaid loss and LAE, gross of reinsurance recoverable, at end of period | $ 64.7 | $ 35.3 | 64.7 | 35.3 | |
Effects of Reinsurance [Line Items] | |||||
Current year | 29.9 | $ 33.5 | |||
Winter Storm Uri | |||||
Add: Incurred loss and LAE, net of reinsurance, related to: | |||||
Current year | 6.2 | ||||
Effects of Reinsurance [Line Items] | |||||
Current year | $ 6.2 | ||||
Proportional Reinsurance Contracts | |||||
Effects of Reinsurance [Line Items] | |||||
Percent of contracts subject to participation through reinsurance | 75.00% | ||||
Ceded commission percentage | 25.00% | ||||
Claims funding percentage | 75.00% | 75.00% | |||
Proportional Reinsurance Contracts | Subsequent event | |||||
Effects of Reinsurance [Line Items] | |||||
Percent of contracts subject to participation through reinsurance | 70.00% | ||||
Proportional Reinsurance Contracts, Tranche One | |||||
Effects of Reinsurance [Line Items] | |||||
Reinsurance contract, term | 3 years | ||||
Proportional Reinsurance Contracts, Tranche Two | |||||
Effects of Reinsurance [Line Items] | |||||
Reinsurance contract, term | 1 year | ||||
Non-Proportional Reinsurance Contracts | |||||
Effects of Reinsurance [Line Items] | |||||
Percent of contracts subject to participation through reinsurance | 25.00% | ||||
Reinsurance contract, term | 1 year |
Other Liabilities and Accrued_3
Other Liabilities and Accrued Expenses (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Other Liabilities Disclosure [Abstract] | ||
Accrued advertising costs | $ 10.3 | $ 6.8 |
Employee compensation payable | 3.8 | 3.7 |
Premium taxes payable | 3 | 3.2 |
Income tax payable | 2.6 | 0.3 |
Advance premium | 2.5 | 0 |
Accrued professional fees | 2.4 | 2.6 |
VAT payable | 0.2 | 0.2 |
Other payables | 3.2 | 1.9 |
Total other liabilities and accrued expenses | $ 28 | $ 18.7 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 01, 2021 | Jan. 19, 2021 | Jan. 14, 2021 | Jul. 02, 2020 | Feb. 18, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | Jul. 07, 2020 |
Sale of Stock [Line Items] | ||||||||
Conversion of Convertible Preferred Stock to common stock upon closing of initial public offering (shares) | 31,557,107 | |||||||
Common stock, authorized (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 (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 (shares) | 0 | 0 | ||||||
Preferred stock, outstanding (shares) | 0 | 0 | ||||||
Affiliated entity | The Lemonade Foundation | ||||||||
Sale of Stock [Line Items] | ||||||||
Contribution to the Lemonade Foundation (shares) | 500,000 | 500,000 | ||||||
IPO | ||||||||
Sale of Stock [Line Items] | ||||||||
Common stock sold (shares) | 12,650,000 | |||||||
Common stock sold, price (usd per share) | $ 29 | |||||||
Net proceeds from sale | $ 335.6 | |||||||
Underwriter's option | ||||||||
Sale of Stock [Line Items] | ||||||||
Common stock sold (shares) | 718,647 | 1,650,000 | ||||||
Net proceeds from sale | $ 114.6 | $ 114.6 | ||||||
Follow On Offering | ||||||||
Sale of Stock [Line Items] | ||||||||
Common stock sold (shares) | 3,300,000 | |||||||
Net proceeds from sale | $ 525.7 | |||||||
Follow On Offering, Selling Shareholders | ||||||||
Sale of Stock [Line Items] | ||||||||
Common stock sold (shares) | 1,524,314 | |||||||
Follow On Offering, Selling Shareholders | The Lemonade Foundation | ||||||||
Sale of Stock [Line Items] | ||||||||
Common stock sold (shares) | 100,000 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) $ in Millions | Jan. 01, 2021 | Jul. 02, 2020 | Jun. 30, 2021 | Jul. 31, 2015 |
2020 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for issuance (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 (shares) | 3,650,000 | |||
Additional shares authorized (shares) | 2,838,412 | |||
Common stock available for grant (shares) | 5,890,700 | |||
2020 ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for issuance (shares) | 1,000,000 | |||
Common stock reserved for issuance, annual increase, percentage of outstanding shares | 1.00% | 1.00% | ||
Additional shares authorized (shares) | 567,682 | |||
Common stock available for grant (shares) | 0 | |||
2015 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for issuance (shares) | 7,312,590 | |||
Common stock available for grant (shares) | 0 | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized expense, stock options | $ 108.2 | |||
Unrecognized expense, period for recognition | 1 year 6 months | |||
Stock options | 2015 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Expiration period | 10 years | |||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized expense, RSUs | $ 6.4 | |||
Unrecognized expense, period for recognition | 1 year 6 months |
Stock-based Compensation - Fair
Stock-based Compensation - Fair Value Assumptions (Details) - Stock options | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average expected term | 6 years 3 months 18 days | 6 years 1 month 6 days |
Risk-free interest rate | 1.30% | 1.00% |
Volatility | 49.00% | 40.00% |
Expected dividend yield | 0.00% | 0.00% |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Options Activity (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | |
Number of Options | ||
Outstanding (shares) | shares | 4,944,711 | |
Granted (shares) | shares | 2,052,325 | |
Exercised (shares) | shares | (739,186) | |
Cancelled (shares) | shares | (223,241) | |
Outstanding (shares) | shares | 6,034,609 | 4,944,711 |
Exercisable (shares) | shares | 1,720,686 | |
Vested and expected to vest, (shares) | shares | 4,313,923 | |
Weighted- Average Exercise Price | ||
Outstanding (usd per share) | $ / shares | $ 20.50 | |
Granted (usd per share) | $ / shares | 102.81 | |
Exercised (usd per share) | $ / shares | 10.56 | |
Cancelled (usd per share) | $ / shares | 39.21 | |
Outstanding (usd per share) | $ / shares | 48.65 | $ 20.50 |
Exercisable, weighted-average exercise price (usd per share) | $ / shares | 13.51 | |
Vested and expected to vest, weighted-average exercise price (usd per share) | $ / shares | $ 62.65 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Outstanding, weighted-average remaining contractual, term | 8 years 6 months 3 days | 8 years 3 months 18 days |
Exercisable, weighted-average remaining contractual, term | 7 years 2 months 12 days | |
Vested and expected to vest, weighted-average remaining contractual, term | 9 years 10 days | |
Outstanding, aggregate intrinsic value, outstanding | $ | $ 382,660 | $ 506,580 |
Exercisable, aggregate intrinsic value | $ | 165,220 | |
Vested and expected to vest, aggregate intrinsic value | $ | $ 217,440 |
Stock-based Compensation - Rest
Stock-based Compensation - Restricted Stock Units Activity (Details) - RSUs | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Number of shares | |
Outstanding as of December 31, 2020 (shares) | shares | 0 |
Granted (shares) | shares | 57,004 |
Vested (shares) | shares | 0 |
Cancelled (shares) | shares | (1,875) |
Outstanding as of March 31, 2021 (shares) | shares | 55,129 |
Grant Date Fair Value | |
Outstanding as of December 31, 2020 (usd per share) | $ / shares | $ 0 |
Granted (usd per share) | $ / shares | 151.58 |
Vested (usd per share) | $ / shares | 0 |
Cancelled (usd per share) | $ / shares | 159.02 |
Outstanding as of March 31, 2021 (usd per share) | $ / shares | $ 151.33 |
Stock-based Compensation - Expe
Stock-based Compensation - Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 11.9 | $ 2.4 | $ 18 | $ 4.6 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 10.5 | 2.4 | 16 | 4.6 |
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 1.4 | 0 | 2 | 0 |
Loss and loss adjustment expense, net | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 0.5 | 0.1 | 0.7 | 0.1 |
Other insurance expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 0.2 | 0.2 | 0.4 | 0.4 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 1.3 | 0.6 | 2.4 | 1.3 |
Technology development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 6.8 | 0.7 | 7.5 | 1.3 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 3.1 | $ 0.8 | $ 7 | $ 1.5 |
Income Taxes (Details)
Income Taxes (Details) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | (3.60%) | (1.00%) |
Net Loss Per Share - Reconcilia
Net Loss Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Numerator: | ||||
Net loss attributable to common stockholders | $ (55.6) | $ (21) | $ (104.6) | $ (57.5) |
Denominator: | ||||
Weighted average common shares outstanding—basic (shares) | 61,444,958 | 11,891,979 | 60,643,764 | 11,750,198 |
Weighted average common shares outstanding—diluted (shares) | 61,444,958 | 11,891,979 | 60,643,764 | 11,750,198 |
Net loss per share attributable to common stockholders—basic (usd per share) | $ (0.90) | $ (1.77) | $ (1.72) | $ (4.89) |
Net loss per share attributable to common stockholders—diluted (usd per share) | $ (0.90) | $ (1.77) | $ (1.72) | $ (4.89) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Potential Common Shares (Details) - shares | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares | 6,089,738 | 4,578,520 |
Related Party Transactions (Det
Related Party Transactions (Details) $ / shares in Units, $ in Millions | Jan. 19, 2021shares | Jan. 14, 2021shares | Feb. 18, 2020shares | Jun. 30, 2021USD ($)director | Jun. 30, 2020USD ($) | Mar. 31, 2020shares | Jun. 30, 2021USD ($)director$ / sharesshares | Jun. 30, 2020USD ($) |
Related Party Transaction [Line Items] | ||||||||
Common shares contribution to the Lemonade Foundation | $ | $ 0 | $ 12.2 | ||||||
Follow On Offering, Selling Shareholders | ||||||||
Related Party Transaction [Line Items] | ||||||||
Common stock sold (shares) | shares | 1,524,314 | |||||||
Common Stock | ||||||||
Related Party Transaction [Line Items] | ||||||||
Contribution to the Lemonade Foundation (shares) | shares | 500,000 | |||||||
The Lemonade Foundation | Follow On Offering, Selling Shareholders | ||||||||
Related Party Transaction [Line Items] | ||||||||
Common stock sold (shares) | shares | 100,000 | |||||||
Affiliated entity | The Lemonade Foundation | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of shared directors | director | 2 | 2 | ||||||
Contribution to the Lemonade Foundation (shares) | shares | 500,000 | 500,000 | ||||||
Contribution of common stock to related party, fair value (usd per share) | $ / shares | $ 24,360,000 | |||||||
Common shares contribution to the Lemonade Foundation | $ | $ 12.2 | |||||||
Affiliated entity | Rental expense | ||||||||
Related Party Transaction [Line Items] | ||||||||
Expenses with related parties | $ | $ 0.1 | $ 0.1 | 0.1 | 0.1 | ||||
Key stockholder | Travel related expenses | ||||||||
Related Party Transaction [Line Items] | ||||||||
Expenses with related parties | $ | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
Commitment and Contingent Lia_3
Commitment and Contingent Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
2021 (remaining six months) | $ 2.6 | $ 2.6 | |||
2022 | 4.9 | 4.9 | |||
2023 | 2.8 | 2.8 | |||
2024 | 2.8 | 2.8 | |||
2025 and thereafter | 4.1 | 4.1 | |||
Aggregate minimum rental commitments | 17.2 | 17.2 | |||
Rental expense | 1.1 | $ 1 | 2.1 | $ 1.9 | |
Office leases, payment guarantees | |||||
Guarantor Obligations [Line Items] | |||||
Guarantees | $ 0.3 | $ 0.3 | $ 0.6 |
Geographical Breakdown of Gro_3
Geographical Breakdown of Gross Written Premium (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)segment | Jun. 30, 2020USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 1 | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Amount | $ 89.5 | $ 46.7 | $ 165.3 | $ 84.8 |
Gross written premium | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
% of GWP | 100.00% | 100.00% | 100.00% | 100.00% |
California | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Amount | $ 22.2 | $ 9.9 | $ 41.4 | $ 19.3 |
California | Gross written premium | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
% of GWP | 24.80% | 21.20% | 25.00% | 22.80% |
Texas | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Amount | $ 18.7 | $ 11.8 | $ 33.7 | $ 20.6 |
Texas | Gross written premium | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
% of GWP | 20.90% | 25.30% | 20.40% | 24.30% |
New York | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Amount | $ 10.9 | $ 5.3 | $ 20.9 | $ 10.2 |
New York | Gross written premium | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
% of GWP | 12.20% | 11.30% | 12.60% | 12.00% |
Georgia | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Amount | $ 4.3 | $ 2.8 | $ 8 | $ 4.9 |
Georgia | Gross written premium | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
% of GWP | 4.80% | 6.00% | 4.80% | 5.80% |
Illinois | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Amount | $ 4.1 | $ 2.6 | $ 7.1 | $ 4.2 |
Illinois | Gross written premium | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
% of GWP | 4.60% | 5.60% | 4.30% | 5.00% |
New Jersey | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Amount | $ 3.7 | $ 1.6 | $ 6.8 | $ 3.1 |
New Jersey | Gross written premium | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
% of GWP | 4.10% | 3.40% | 4.10% | 3.70% |
Pennsylvania | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Amount | $ 2.3 | $ 1.1 | $ 4.1 | $ 1.8 |
Pennsylvania | Gross written premium | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
% of GWP | 2.60% | 2.40% | 2.50% | 2.10% |
Michigan | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Amount | $ 1.9 | $ 1.4 | $ 3.5 | $ 2.4 |
Michigan | Gross written premium | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
% of GWP | 2.10% | 3.00% | 2.10% | 2.80% |
Colorado | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Amount | $ 2 | $ 0.8 | $ 3.4 | $ 1.5 |
Colorado | Gross written premium | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
% of GWP | 2.20% | 1.70% | 2.10% | 1.80% |
Maryland | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Amount | $ 1.8 | $ 0.9 | $ 3.4 | $ 1.7 |
Maryland | Gross written premium | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
% of GWP | 2.00% | 1.90% | 2.10% | 2.00% |
All other | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Amount | $ 17.6 | $ 8.5 | $ 33 | $ 15.1 |
All other | Gross written premium | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
% of GWP | 19.70% | 18.20% | 20.00% | 17.70% |