Slide 1: Performance Highlights Q2 2020
Performance Highlights Q2 2020
Slide 2: Safe Harbor Statement and Forward-Looking Statements
Safe Harbor Statement and Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be considered f
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures The non-GAAP financial measures used in this presentation are Adjusted Gross Profit, Adjusted EBITDA, and Ratio of Adjusted Gross Profit to Gross Earned Premium. We define Adjusted EBITDA as net loss excluding interest expense, income tax expense, depreciation, amortizati
Slide 4: Non-GAAP Financial Measures (cont’d)
Non-GAAP Financial Measures (cont’d) The non-GAAP financial measures used in this presentation have not been calculated in accordance with GAAP and should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, GAAP resu
Slide 5: Key Performance Indicators
Key Performance Indicators This presentation also includes key performance indicators, including customers, in force premium, premium per customer, gross earned premium, gross loss ratio and net loss ratio. We define customers as the number of current policyholders underwritten by us or placed by us
Slide 6: Key Performance Indicators (cont’d)
Key Performance Indicators (cont’d) We define Premium per Customer ("PPC") as the average annualized premium customers pay for products underwritten by us or placed by us with third-party insurance partners. We calculate PPC by dividing IFP by Customers. We view PPC as an important metric to assess
Slide 7: Table of Contents
Table of Contents 1. Performance Highlights 2. Business Updates 3. Guidance 4. Appendix / GAAP Reconciliations 7
Slide 8: Performance Highlights: Customers, Premium per Customer, IFP
1. Performance Highlights Customers * PremiumPer = IFP (in ‘OOOs) Customer (In Force Premium -$ in m) 814 $190 $155 $163 $139 443 $72 168 $23 Q218 Q219 Q220 Q218 = Q219 §=Q220 Q218 Q219 Q220 YoY growth: 163% 84% 17% 17% 208% 115%
Slide 9: Performance Highlights: GEP and Adj. Gross Profit
1. Performance Highlights GEP Adj. Gross Profit (1) (Gross Earned Premium -$ in m) ($ in m) $35 $7 $16 $2 $5 $1 Q218 Q219 Q220 Q218 Q219 Q220 YoY growth: 233% 121% 156% 204% (1) Adj. gross profit is anon-GAAP metric. Please refer to final page in presentation for reconciliation from GAAP gross profi
Slide 10: Performance Highlights
1. Performance Highlights 10
Slide 11: Performance Highlights
1. Performance Highlights 11
Slide 12: Performance Highlights
1. Performance Highlights 12
Slide 13: New Reinsurance Program, Effective 7/1/2020
New Reinsurance Program, Effective 7/1/2020 Property per Risk and Facultative reinsurance covers entire book Estimated cost = ~2.5% of GEP Remaining premium (~97.5% of total) subject to proportional reinsurance 25% retained by Lemonade Lemonade pays proportional share of customer claims Remainder us
Slide 14: Illustrative: Impact of New Reinsurance on GAAP Metrics
2. Business Updates Illustrative: Impact of New Reinsurance on GAAP Metrics Gross Earned Premium Revenue Gross Margins Adj. Gross Profit Q419 Q120 Q2 20 Q3 20 Q4 20 Core operating performance captured by KPIs and non-GAAP metrics, while GAAP results show dramatic swings reflecting changes to reinsur
Slide 15: Forward-Looking Guidance
Forward-Looking Guidance Q3 2020 Guidance Range Full Year 2020 Guidance Range Low High Low High In Force Premium (as of end of period) $170 $175 $190 $195 Gross Earned $37 $39 $147 $151 Revenue $14 $15 $86 $88 Adj. EBITDA) ($33) ($32) ($109) ($106) (1) Adjusted EBITDA is anon-GAAP metric. A full rec
Slide 16: Appendix / GAAP Reconciliations
4. Appendix / GAAP Reconciliations 16