Digital insurer Lemonade said it has closed of the acquisition of pay-per-mile car insurance provider Metromile in an all-stock transaction.
Metromile shareholders received 7.3 million Lemonade shares, while Lemonade received a business with over $155 million in cash, over $110 million in premiums, an insurance entity licensed in 49 states, and a team it said is “unsurpassed in harnessing precision data for auto insurance.”
“We launched Lemonade Car a few months ago, and believe it’s the most delightful product on the market. We also believe auto insurance is challenging for newcomers and disadvantaged by a lack of data which is why we bought Metromile,” said Shai Wininger, Lemonade co-CEO, in a statement. “For ten years, Metromile’s intricate sensors monitored billions of miles of driving, while their AI cross-referenced this data with hundreds of thousands of claims to accurately score each tap of the brake and turn of the wheel.
“We believe that adding these models into the Lemonade Car platform will make the most delightful car insurance also the most competitive, precise, and fair.”
Lemonade announced the planned deal in November 2021, just a week after launching Lemonade Car in Illinois. The AI-powered insurance company includes renters, home, pet, life and auto in its product suite. In a letter to shareholders early this year, Lemonade executives said to expect peak losses in 2022. However, the forecast did not include the impact of Metromile acquisition.
Lemonade said most Metromile employees will transition to roles 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 car insurance, Lemonade forged a parallel path for several complementary lines of insurance. That makes for a powerful combination,” said Preston. “The upshot is that Metromile’s mission to connect the world to personalized insurance receives a big boost today. While the Metromile brand will sunset over time, its promise to consumers will be realized bigger, better, and sooner now that we’ve joined forces.”
The Metromile app and brand will continue in-market until all customers can be seamlessly transitioned to the Lemonade app and brand. Metromile common stock will cease trading on NASDAQ, Lemonade said.
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