LMND · Forward model · Pet · Schreiber case
What has to happen in Pet
Model as of
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Pet
Basis quarter$95M
Final quarter$509M
Implied CAGR+40%
Final revenue mix31%
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: $509M (2031Q2E)
| Period | Value |
|---|---|
| 2024Q3 | $27M |
| 2024Q4 | $30M |
| 2025Q1 | $32M |
| 2025Q2 | $36M |
| 2025Q3 | $48M |
| 2025Q4 | $64M |
| 2026Q1 | $78M |
| 2026Q2 | $95M |
| 2026Q3E | $106M |
| 2026Q4E | $118M |
| 2027Q1E | $130M |
| 2027Q2E | $143M |
| 2027Q3E | $157M |
| 2027Q4E | $172M |
| 2028Q1E | $189M |
| 2028Q2E | $206M |
| 2028Q3E | $224M |
| 2028Q4E | $243M |
| 2029Q1E | $264M |
| 2029Q2E | $286M |
| 2029Q3E | $309M |
| 2029Q4E | $333M |
| 2030Q1E | $359M |
| 2030Q2E | $386M |
| 2030Q3E | $414M |
| 2030Q4E | $444M |
| 2031Q1E | $476M |
| 2031Q2E | $509M |
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.