While Lemonade has been at the forefront of using big data and artificial intelligence in home and pet insurance, Metromile has been blazing a parallel path in car insurance. In recent years, Metromile's car-mounted precision sensors have taken over 400 million road trips, covering billions of miles and sending real-time streams to the Metromile cloud. These were cross-referenced with actual claims data, yielding precise losses per mile driven predictions. These algorithms have the potential to catapult Lemonade Car from a latecomer to the forefront of the car insurance industry.
"We launched Lemonade Car last week, and we think you’ll love how it looks and handles. Pop the hood and you’ll see that it's powered by telematics and architected to learn from the data it generates, with precision pricing as its ultimate destination," said Daniel Schreiber, Lemonade CEO and cofounder. "That’s where Metromile comes in. They have been down this road billions of times, and their proprietary data and machine learning algorithms can vault us over the most time and cost intensive parts of the journey. In a vast and competitive market like auto insurance, today’s deal is a huge unlock of value for our customers and shareholders."
Metromile enjoys 49 state licenses, over $100 million of seasoned in-force premium (IFP), over $250 million of cash on the balance sheet, and a team unmatched for their expertise in harnessing big data and AI for car insurance.
"We’ve long admired Lemonade for its beautiful products, world-class customer experience, unprecedented growth, and socially-impactful business model," said Dan Preston, CEO of Metromile. "The data science-driven technology platform we built created fairer and more individualized car insurance for consumers in an industry marred by vast inequities. Joining forces with Lemonade Car will create the most customer-centric, fair, and affordable car insurance, and is a great outcome for Metromile shareholders, who will benefit as shareholders of the combined company. It also means that now, homeowners, renters, and drivers alike can have all of their insurance needs with a single company that truly has their best interests at heart."
The transaction is expected to close during Q2 2022, once all regulatory approvals have been secured. The transaction requires the approval of Metromile stockholders, and is subject to other customary closing conditions.