Here's Why I Still Own Lemonade Stock
Lemonade (NYSE: LMND) stock might be the worst stock investment I've ever made. The insurance technology company's stock price is down about 75% since I joined the legions of fans who were enthusiastic about this innovative insurance company's potential and I became a shareholder. Despite the market sell-off, I'm holding on to this stock for now. And while I wouldn't recommend it for every investor right now, I still believe in the company and what it can do for the insurance industry. Here's why I still own this stock.
Lemonade aims to provide low-cost renters, auto, home, pet, and life insurance coverage using an artificial intelligence-driven rating system. Its high-tech business model features a mobile app and AI to generate quotes, service policies, make payments, and file claims. It promotes its ability to process claims much more quickly than the competition.
Lemonade has shown rapid growth across its products and it's negative investor sentiment is a bit head-scratching given the kind of numbers Lemonade posts. Management has a well-thought-out strategy that involves capturing younger customers, often those who are buying insurance for the first time (generally renters insurance), and turning them into customers for life by way of making the process easy, low-stress, and affordable. Over time, these policyholders take out larger policies and buy more products as they become homeowners, car owners, and more. Between growth in customers and growth in premium per customer, which happens as they buy more products and more expensive products, Lemonade's in-force premium, which it considers its top-line growth metric, continues to grow in high double-digit percentages.
Source Fool.com
