LMND · Forward model · Europe · Bear case
What has to happen in Europe
Model as of
This page changes Europe inside the complete LMND model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.
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Europe
The UK, Germany, the Netherlands and France under one pan-EU licence: $74M of in-force premium, up 72% year over year off a base small enough that the growth rate flatters it. Premium per policy is $191, below even US renters, because the book is mostly contents and liability cover for young urban renters. The loss ratio is 71% and improving from 91% a year ago. At 5% of in-force premium this is optionality on the same software working in a second regulatory regime, not a profit centre.
Latest: $43M (2031Q2E)
| Period | Value |
|---|---|
| 2024Q3 | $2M |
| 2024Q4 | $3M |
| 2025Q1 | $3M |
| 2025Q2 | $4M |
| 2025Q3 | $6M |
| 2025Q4 | $9M |
| 2026Q1 | $11M |
| 2026Q2 | $13M |
| 2026Q3E | $14M |
| 2026Q4E | $15M |
| 2027Q1E | $16M |
| 2027Q2E | $18M |
| 2027Q3E | $19M |
| 2027Q4E | $20M |
| 2028Q1E | $22M |
| 2028Q2E | $23M |
| 2028Q3E | $25M |
| 2028Q4E | $26M |
| 2029Q1E | $28M |
| 2029Q2E | $29M |
| 2029Q3E | $31M |
| 2029Q4E | $32M |
| 2030Q1E | $34M |
| 2030Q2E | $36M |
| 2030Q3E | $38M |
| 2030Q4E | $39M |
| 2031Q1E | $41M |
| 2031Q2E | $43M |
Assumptions & reasoning
- Four countries on one pan-EU licence, so incremental country launches carry regulatory cost but not a new licence. That is why the model lets policy adds keep compounding rather than capping them at today's rate.
- The loss ratio has improved from 91% to 71% in five quarters but remains the second worst of the five lines, and the base is small enough that a single catastrophe quarter would move it materially.
- At $191 of premium per policy this is the cheapest product Lemonade sells anywhere, so Europe adds customers faster than it adds premium - the mirror image of Car.
- The terminal margin on this line is NOT purely underwriting. It is a seasoned loss ratio plus about 27 points that stand for Lemonade's fixed cost base being spread across a larger book. The engine holds sales and marketing, technology and general and administrative at a constant 52.65% of revenue, so operating leverage - the entire profitability thesis - has nowhere else to live. Read the basis margin as disclosed economics and the terminal margin as economics plus an assumption.