Auto insurtech Lemonade reported a 71% increase in gross earned premiums during the first quarter of 2022, ending the period at $96.0 million, compared to $39.8 million.
However, the company’s net loss widened from the first quarter of last year to $74.8 million in the first quarter of 2022 from a loss of $49.0 million previously.
Revenue for the quarter increased by $20.8 million, or 89%, to $44.3 million, primarily due to higher gross earned premiums during the quarter and an increase ceding commission income from reinsurers.
First quarter gross profit also increased by $8.3 million to $10.2 million, primarily due to an overall increase in total revenue during the period. In the first quarter of 2021, gross profit was negatively impacted by the Texas Freeze.
Total operating expenses, excluding net loss and loss adjustment expenses, increased 68% in the first quarter to $92.5 million from $55.1 million in the first quarter of 2021.
According to Lemonade, the increase was primarily due to increased investment in advertising and employee-related expenses to support growth, which impacted sales and marketing, technology development, and general expenses and administrative.
Adjusted EBITDA loss of $57.4 million increased $16.1 million from the first quarter of 2021, primarily due to higher operating expenses.
And the company’s cash, cash equivalents and investments totaled $1,013 million as of March 31, 2022, compared to $1,072 million as of December 31, 2021, primarily reflecting $39.5 million of net cash used in operations during the first quarter.
During the second quarter of 2022, Lemonade expects to report in-force premiums of $445-450 million, gross earned premiums of $103-105 million, and revenue of $46-48 million.
For the full year, in-force premiums are currently estimated to be between $535 and $545 million, gross earned premiums between $426 and $430 million and revenues between $205 and $208 million.
“While the impact of the COVID-19 pandemic, inflationary pressures and geopolitical unrest, including the war in Ukraine, on market volatility remains highly uncertain, we are confident in our business model and expect to continue. to provide quarterly and annual guidance. consistently,” Lemonade commented. “We will provide investors with updated trading trends as macro conditions evolve.”