LMND · Forward model · Pet · Bull case
What has to happen in Pet
Model as of
This page changes Pet inside the complete LMND model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.
Shares this vertical and portfolio case. Slider and horizon edits stay in your browser.
Pet
Basis quarter$95M
Final quarter$461M
Implied CAGR+37%
Final revenue mix38%
About to overtake homeowners: $543M of in-force premium against $554M, growing 55% year over year while homeowners grew 6%. Accident, illness and diagnostics for dogs and cats, at $839 a policy - three and a half times a renters policy. It is the best cross-sell Lemonade has and the worst loss ratio of the three large lines at 74%, which went UP in the basis quarter. Pet is where the growth is and where the underwriting question is.
Last four quarters
2025 Q3
$48M
Estimated
2025 Q4
$64M
Estimated
2026 Q1
$78M
Estimated
2026 Q2
$95M
Estimated
Accident and illnessDiagnosticsOptional wellness
Subscribers
647K
4.3% of a 15.0M addressable base
647,199 policies: $543M of in-force premium over $839 of premium per policy.
Addressable subscribers
15.0M
the S-curve ceiling
US dogs and cats in households likely to insure. About 4% of the national pet population is insured at all.
Net adds
51K/qtr
ramping toward 95K/qtr, throttled as the base approaches the TAM
51,092 policies added in the basis quarter, the change in the derived policy count.
Net-add ceiling
95K/qtr
what supply can deliver at full rate
95,000 policies a quarter, where this line's pace of adds stops rising.
ARPU
$49.15/mo
drifting +1.5% per quarter, floor $0.00
$49.15 a month net of reinsurance, against $69.92 gross that Lemonade publishes.
Non-subscriber revenue
$0/qtr
growing 0.0% per quarter
Zero. Every dollar of this line is premium earned on the policy base; there is no non-policy revenue in it.
Pet
Latest: $461M (2031Q2E)
| Period | Value |
|---|---|
| 2024Q3 | $27M |
| 2024Q4 | $30M |
| 2025Q1 | $32M |
| 2025Q2 | $36M |
| 2025Q3 | $48M |
| 2025Q4 | $64M |
| 2026Q1 | $78M |
| 2026Q2 | $95M |
| 2026Q3E | $106M |
| 2026Q4E | $116M |
| 2027Q1E | $128M |
| 2027Q2E | $140M |
| 2027Q3E | $153M |
| 2027Q4E | $167M |
| 2028Q1E | $182M |
| 2028Q2E | $198M |
| 2028Q3E | $214M |
| 2028Q4E | $232M |
| 2029Q1E | $250M |
| 2029Q2E | $269M |
| 2029Q3E | $290M |
| 2029Q4E | $311M |
| 2030Q1E | $333M |
| 2030Q2E | $356M |
| 2030Q3E | $381M |
| 2030Q4E | $406M |
| 2031Q1E | $433M |
| 2031Q2E | $461M |
Assumptions & reasoning
- Pet passes homeowners as the largest line within a quarter or two on the current rates, and it does so at nearly three times the loss ratio - 74% against 44% - which is why the blended gross loss ratio has stopped falling even as homeowners improves.
- Its loss ratio went UP in the basis quarter, from 69% to 74%, the only large line that deteriorated. Management attributes group improvements to instant claim rates in Pet and Renters, so this is a frequency and severity question rather than a handling-cost one.
- Premium per policy has risen every quarter for two years, $712 to $839, which is rate and mix rather than volume - the opposite pattern to homeowners.
- 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.