Digital insurer Lemonade said it has completed its acquisition of auto insurer Metromile in an all-stock transaction.
Metromile shareholders received 7.3 million Lemonade shares, while Lemonade received a company with more than $155 million in cash, more than $110 million in premiums, an insurance entity licensed in 49 states, and a team that “is unsurpassed.” in leveraging precision data for auto insurance.”
“We launched Lemonade Car a few months ago and we believe it is the most delicious product on the market. We also believe that auto insurance is a challenge for new entrants and is penalized by a lack of data, which is why we bought Metromile,” said Shai Wininger, co-CEO of Lemonade, in a statement. “For a decade, Metromile’s intricate sensors monitored billions of miles, as their AI crossed this data with hundreds of thousands of claims to accurately score every tap of the brake and every turn of the wheel.
“We believe that adding these models to the Lemonade Car platform will make the best auto insurance coverage the most competitive, accurate and fair.”
Lemonade announced the planned deal in November 2021, just a week after Lemonade Car’s launch in Illinois. The AI-powered insurance company includes renters, home, pet, life and car in its product suite. In a letter to shareholders early this year, Lemonade executives said they expect peak losses in 2022. However, the forecast did not factor in the impact of the Metromile acquisition.
Lemonade said most Metromile employees will transition into positions at Lemonade, and Metromile CEO Dan Preston has assumed the role of senior vice president of strategic initiatives.
“While Metromile was at the forefront of using big data and AI in auto insurance, Lemonade forged a parallel path for several supplemental insurance policies. That makes for a powerful combination,” says Preston. “As a result, Metromile’s mission to connect the world with personalized insurance is getting a major boost today. While the Metromile brand will fade over time, the promise to consumers will be realized bigger, better and faster now that we have joined forces.”
The Metromile app and brand will remain in the market until all customers can seamlessly transition to the Lemonade app and brand. Metromile’s common stock will no longer be traded on NASDAQ, Lemonade said.
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