Lemonade forms fronting arrangement with Home State

State filings reveal that Home State Insurance Group reported direct premiums amounting to roughly $7.5 million for Lemonade auto insurance in the year 2023. This amount crosses the disclosure threshold, signifying the first time Lemonade Insurance Agency has been reported with another insurance carrier entity.

Corroborating this development, Lemonade’s annual statement disclosed that starting in December 2022, the company began to assume premiums related to car insurance policies written in Texas. This was a result of a fronting arrangement with a third-party carrier based in Texas.

As a point of reference, Lemonade Car was launched around November 2021, in parallel with the acquisition of the pay-per-mile insurer Metromile, which Lemonade acquired for $145 million in Lemonade stock. Conversely, Lemonade gained a business with assets including over $155 million in cash, upwards of $110 million in premiums, and an insurance license operative in 49 states.

Over two years later and Lemonde Car is available in 7 states, namely Arizona, Illinois, Ohio, Oregon, Tennessee, Texas, and Washington. According to CEO Daniel Schreiber, car insurance contributed to about 15% of their total In-Force Premium (IFP) in 2023. He expects the same share in 2024.

Lemoande is one of several MGAs writing business with Home State:

Home State’s MGAs ’23 DPW ($M)
Imperial General Agency of Texas 147.6
Aspen Managing General Agency 101.9
MIC Insurance Agency 84
Apollo Managing General Agency 76.9
Clearside General Insurance Services 54.4
SNAP Insurance Services 53.6
Apollo Specialty Auto 43.6
Ignition Insurance Services 36.4
Network E&S Insurance Brokers 35.7
Aggressive Insurance Services 33.2
AmWins Specialty Auto 27.1
Excellent Insurance Services 21.8
Kemper Direct General Agency 15.5
Acuity TX MGA 12.3
New Star General Agency 10
Lemonade Insurance Agency 7.5
Safe Insurance Management Group 7
Esurance Insurance Services 7
The Vision Insurance Group 6.8
Congress General Agency 6.2
Lonestar Managing General Agency 5.4
Kemper General Agency 5
Germania General Agency 3.3
Auto MGA 2.5
Multi-State Insurance Services 2.5
Freeway Managing General Agency 1.6
Star Canyon Insurance Services 1
Texas Ranger Managing General 1
Integon National Insurance Company 0.6
National General Insurance Marketing 0.6
Coast National General Agency 0.5