Q3 2020 Lemonade Inc Earnings Call
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Okay, and welcome to the lemonade. Hang on your self-install. All participants will be home.
After today's presentation, there will be an opportunity to ask questions to ask a question about there's about is being recorded. I would now like to turn the phone for service.
Good morning, and welcome to Lemonade third quarter 2020 earnings call. My name is Levi and I am the VP Communications at lemonade joining me today to discuss our results are Daniel Shriver CEO and co-founder wininger CEO and co-founder John Peters Chief underwriting officer and Tim Bixby our Chief Financial Officer a letter to shareholders covering the company's third-quarter 2020 Financial results is available on our investor relations website investor. Before. We begin I would like to remind you that Management's remarks on this call may contain forward-looking statements within the meaning of the private Securities litigation Reform Act of 1938 fine actual results, May differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussing the risk factors section of Reform Club.
Q for the three months that ended June 30th of 2020 and there are other filings with the SEC and it's always looking statements made on this call represent our views only as of today. We undertake no obligation to update them. We will be referring to certain non-gaap Financial measures on today's call such as adjusted ebitda and adjusted gross profit, which we believe that's important to investors to assess our operating performance reconciliations of these non-gaap Financial measures to the most directly comparable gaap. Financial measures are included in our letter to shareholders off. Our letter to shareholders also includes information about our key operating metrics including a definition of each metric. Yeh is useful to investors and how we use each to monitor in that way our business with that. I'll turn the call over to Daniel who will begin with a few opening remarks Daniel.
I'm happy to report that I returned strong results and performance indicators despite concerns that you can domik might disrupt migratory off-season strongest quarter. In fact that growth into skilled improving across a unit economics you are interest or ifp doubled adjusted gross profit to jump 138% while I left her Bella are ghosts and premium carved operation.
Populate everything that happened before it was something that didn't happen the dog that didn't bark but you may need the money vent which is easy and you check out the highlights.
The rest of the United States this year and the fire alone California's most destructive home equity situation the National Hurricane Center main storm pass identity document a one out of the you know had the thought of this time of the accident that has never happened. So early move unprecedented deserve the most popular state in Union, which are also home of lemonade customer. The bank is devastating backdrop the significance of the dog that didn't bark a loss ratio of the QP women perfectly healthy is a month at 72% more than 7% lower than the corresponding for the last year.
Add a reminder below 75% left you in charge make money at 25% even without the insurance and there's typically left of them plugged it back.
It's 75% so it should be okay and economic should be largely unchanged because I was in the finance office, but the fact that I didn't even ask if you did is in one event of notes. I put the bill for about ten billion dollars of catastrophic or cat locking cooking food.
Average based on market share you could have expected at about Seventeen million dollars in the group home a hundred percent with some 75% lower than that program. I did have predicted and the last thing if you decline during your dead
you said you needed to talk to I'm driving in the parts of the country and it says that they're not growing loading up and paying a month.
the second thing of milk
About 40% of the time lemonade customer these newcomers delivered about nine times more money and the generator from you, in the three months following our initial range for years ago. And you did that of the weight of marketing efficient. You got it took us two years to achieve back into products not only have package provided an additional online Clement, but about 5% of these newcomers added a length of a homeowners policy with them.
And that's completely like the Netflix look for newcomers for existing customers who comprise the majority of insurance and average of $450 to buy prunes and almost three-fold jump in the museum premiums without incurring any cost at all to acquire incremental premiums.
Maybe I'll have you off with you when the need the model and ensure we get a fabulous experience with lemonade so that as they progress in predictable life cycle events. They enjoyed the Explorer orders of magnitude and you do that with us.
Significant phenomenon continue to bring the we do not have any Bill to about 12% of our policy holders. Because winter that lemonade and then graduated to come home with the enemies. In fact, there are several. I have to double year-on-year in the third quarter off from custody graduating from blinking blue by a few hundred percent still within three months or 36,000 average from $150 before graduation to $900 after again with no incremental cost to acquire the internet.
You believe in strong president in between product line a tremendous run to give an affortable by adding more products. And on that note. Let me hand over the size of update you on Thursday. Sorry. Thank you Daniel boundary between the insurance and life insurance. Regulatory. Frameworks wage are quite sixteen and insurance companies tend to settle into one domain or the other we understand their consideration, but we strive to provide product launches basically package rather than regulatory Frameworks, which is why in recent months we established a limited life insurance agency. If I return to bring the lemonade experience to determine wage Market in the coming months.
I'm giving you a heads up about the forthcoming product launch. I'd like to.
No movement to highlight how we think about product and initiatives and their associated with computers. It is not worthy of replacing the back and term life even though we're not charging. It will be a river other insurance companies have struggled to make the economics of digital acquisition work with term life policy and you often wonder if you can be there. So why are we launching for life? Because there are important differences between us and Them differences between this is smart best despite the alternative for one month to download models because we'll be leveraging technology than system already in place.
We will not be on driving and we'll have a captive audience of a million customer to whom we can mark it for free.
This is something we're excited about our technology platform user experience an incredible customer service can be leveraged for products report from scratch as well. As for one that others may need to read the trigger from nineteen to homeownership are often triggers for buying one first life insurance policy. Average age for buying the first time the u.s. Is about 33, which is also about the average age in college grads have their first child is also about the page customer or the cost of the status not high. The potential price is according to research and markets., double term life insurance worth about $800 billion this year and is expected to grow more in 10% compounded annually to order to trillions by the end of the decade and the road in r s
On Sunday, we prefer to make decisions under conditions of uncertainty and instead. As soon as the data reveal going to be built.
Is available to the people but also to better academically turns into trade you're comfortable linking.
Any that let me hand over the team. So be more detailed around our financial results and Alex came home. So it was it was for the fourth quarter and then we'll take your questions about enforced premium 99% to 3 is 2:30 to 3 in the prior-year to a hundred eighty eight point nine billion dollars. This metric captures the full scope of our top-line growth before we took the reinsurance and regardless of the timing of customer acquisition during the quarter.
Premium for customer increased 19% versus the prior-year to $201 increase was driven by a combination of increased value of policy over time. It was always mix shift to a higher voltage homeowner policies roughly two-thirds of the growth in premium for customer in Q3. We driven by this product mix shift and the remaining 1/3 from increased wage levels.
No, sir.
Premium into three increased 104% as compared to the prior-year to forty two point nine million dollars in line with the increase in towards premium. Our gross loss ratio is 70% 43 despite significant cat activity in Porter representing an improvement from 78% in the third quarter of 2019. We continue to expect our gross operational very over time. We're going to target range for annual operations, but below seventy-five percent with occasional short-term results slightly outside the strange, it's notable that the average coleslaw slaw McKean sector overall in recent years is approximately 82% into the top twenty players about 72% Even in a tougher cat quarter are groups loss ratio remained highly competitive.
Operating expenses excluding loss and loss adjustment expense increased just 11% and came through as compared to the prior-year with sales and marketing expense again actually lower down 25% compared to the prior-year. Can you continue to Improvement that are marketing efficiency also to note certain reason and expenses increased as expected related primarily to public companies if it's like corporate insurance and Professional Services.
We also continue to hire a team members in all areas of the company in support of customer and premium growth and new product launches and less saw increases in each of the Other Extreme Global headcount. Roughly doubled versus the prior-year to the 469 people with the greater growth rate in customer-facing departments and product development teams.
Net loss was 30.9 million dollars in Q3 slightly better than the $31 loss reported in the third quarter with a notably larger customer base. Well adjusted ebitda loss was twenty seven point six million dollars as compared to Thirty point four billion dollars in the third quarter of 2019.
Our cash cash equivalents and total Investments ballots ended the quarter at $597 and $4 reflecting primarily been the proceeds from our July public offering 835 million dollars partially offset the use of cash for operations seventy 1 million dollars since year-end 2019 with these goals are different in mind off outline are specific Financial expectations for the fourth floor and the full year of 2020 for the fourth quarter of 2020. We extract enforce premium at December Thirty one of them two hundred and $205 million dollars gross premium of forty-six to Forty-Eight billion dollars. Do you have the revenue but between 18 and $19 a month and adjusted you without loss between $34 and $32 billion dollars.
You check stock based compensation expense of approximately 3 million dollars in capital expenditures approximately 1 million dollars.
From a soldier 20-point you expect again influence premium at December third one between two hundred and two hundred and five million dollars gross earned premium between 154 and 157 million M as ninety-one to ninety-three million dollars and adjusted the. Los 103 and $100. We also expect stock-based compensation expense for the full month. Approximately eleven million dollars in capital expenditures approximately four million dollars.
As a reminder, please note the Gap accounting or excluded from as a result of this change in our reinsurance structure that was effective underwire 1/2 a significant proportion of reinsurance structure. Are you over your gross margin comparisons are not comfortable accordingly. We published enforce premium and girlfriend premium as metrics that we believed in captions Roblox to get rid of business before the impact of an insurance.
Thanks so much for joining our second for me reviews a public company. Who do you appreciate your interest in support? It's at the call back over to the operator. You can perhaps reach you on the call to my instructions and we'll be happy to take your questions.
We will now begin the question-and-answer session wage. So the charger question, please press five.
Okay. Thanks. Good morning, You've got it to what could yourself quarter this quarter? Because it keeps Mallory in the people not moving as much as I could toward. It's okay drilling to the the new customers with the Volkswagen are not being able to see the headlines or Thursday. So kind of going down the two women new customers came from a
You make sure so the customer growth came in remarkably as expected. But as expected in a more normal year if you have been cautious about adding in the Q3 about what some of the oil changes might be this year. And the reality is we just really haven't seen them were seeing seasonal patterns repeat a significant place and I think that the numbers came in quite strong supporter is because of the things we had a little more concerned about early in the year are not happy to wait extent. So we're continuing to add customers in a very healthy page important to note that we do Focus even more so than customers on dollars. So premium growth is Paramount. So sometimes the end of the floor of the customer account can be slightly off-cycle wage, but we're really happy with both the customer account and the premium growth and I think you'll see sort of in the guidance and then some of the comments we make today that we're really soon as you come off.
From the seasonality standpoint very much in mind is what we seen in Prior years.
Your networks Rachel is actually really strong. Obviously. How much is a 6% cab number that you talked about for the voice and the roadside how much of that was? What was your cat a net loss ratio. If you could talk about you know, what was on the line or really strong? You know, I guess it would that be back on something from the cab and how much money yeah, I would think so. I don't have a a disposable number today will have the statutory filings out shortly for a specific past numbers, but generally I can't say that we saw roughly ten points of impact from cat in the quarter. But normal quarter does have some cat index and not all of that was incremental from your significant activity wage would be something like half or what behalf of that impact would be out of the wanting to know when you're looking at the net loss ratio vs. The gross loss ratio. There are some, New Jersey
Okay. Thanks and you talk about the the cat numbers, you know?
Because of our insurance transition that happening on July one and so we'll continue to kind of share that overall growth Los Reyes for that. 72% number is really the apples apples comparison. And so if you back out the cat and think about you know, we were last quarter at 67 pretty much pretty much right in line and also even even with the activity in line before we weren't you wanted so we're really pleased with how our underwriting really read or what I think is a pretty significant test this quarter and bring the loss ratio of both on the growth and that way just that I can shows really strong performance.
Okay.
I'm focused on the growth. Yeah, so I'm thinking it on a gross basis.
Okay, and then I guess I'll confirm your comments on the sales and marketing spend some efficiencies gave me for the phone number. I'm looking for any proactive to lower because of what might happen in the quarter of the people not moving through the pullback any selectively enforced because those concerns in a quote.
So we don't we don't really pull back in anticipation of things. We're not sure whether they're going to happen. We're managing this in real time. So we need to spend we spend that I think that's when you see the quarter an aggregate talked to see what sort of the ABS and flows of how we manage the growth spending on a day-to-day basis, but we saw again really consistent patterns with what we've seen in Prior prior years and it's really kind of an arc over the course of two free for the season. We tighter border. Generally. That's what we've seen for two years. Now, that's all she reflected in the guidance. But I think you know just do that. You're on your comparison what we're spending for marketing and what we're bringing in. It's pretty I was going to say extraordinary in the field Club that but, you know still more than a year on year is it's just been a really significant Improvement.
Okay. Thanks. Last one real quick in your car value you talked about the 300% off in the quarter compared the last quarter from the graduation to homeowners in.
Comments on the condo remote control percent, but it's on the products of regular commenters. So I guess you can expect to find that working here in my lifetime. The 300% is that Thursday from 6 to 2, so we can make a difference between Congress which is 4 months or 20% or go through, which is which one is that sure. Yes two very different metrics, but on the same topic, so the condo percentage is condos alone at 12% and I can see exact something off for about a year. That's a nice steady upward marched a 300% We looked at all of our homeowner graduation. So whether whether condo or home combined and we saw an uptick wage, uh graduation rate three times higher than a year or a good progress because it's different metrics.
Okay. Thanks. I appreciate it. Yep. I've got two questions about maybe just broadly why why life insurance vs. Car insurance? Cuz I think just that's a question people. Have you think about vertical expansion and then the second kind of the launch of of of the life, how how do you think that'll impact reported marketing efficiency and to the extent that you lean into that? Is there a way to you know, how long would you be able to kind of separate out the impact over the next eighteen months or we can understand kind of you know the efficiency in the Legacy business versus the investments in the new business et cetera. Thanks.
Daniel let me take the first part of your question is what life instead of car at a different time aspirations are pretty expensive. Hey, we're looking to build really wanted to she was behind what we're doing is that we want to build and I contact insurance company for the 21st century and then it's going to be customer and cater in the forms of time to all of our customers needs and go with them as leads growing time through month ago life. We've announced today that we would be so packed with an answer data in 3 months of your life and see see that we had a fairly steady clip launching new products and you can assume that before we're done. We want to leave the box on a customer needs just a question of sequencing you have any questions why one router and as I mentioned specifically around life, there's a goodness of fit to other.
Nothing that we we talked about. So 10 just give some some numbers to Mike about graduation and and do see that this kind of need to leave life cycle events. I when people go from being individuals being families having responsibilities that up and clean sides with with buying a home that having a kid with the suburbs in your family. Those things are dead unlocks me a dent in close proximity wants the other and do see that the buying habits of life and home overlap a great deal. So do you feel like the goodness of Life the right stage of life, but others would like to comment this isn't one product instead of the other is just one before the other. Yeah, maybe from the from the market needs to your email economic standpoint at this point pretty much. Uh, you shouldn't expect any dramatic shift in how we can figure out what we invest in Marco.
$40 require uh
Well think of the customers holistically and I think we'll probably see something that looks like a path to some extent to some extent or will have customers who buy Life only as their first product and then hopefully branching off when they products and vice versa. We're nearing a million customers before too long and we anticipate that some percentage of those increasing customers will also have life insurance meetings and so month each, would be launching products that our internal key performance metrics indicators start at a certain place and they tend to improve over time wage of the nature of anything. That's it's new, but I would expect it to be the same for us, but we have in the past optimize reasonably quickly actually got to replace quite a bit more at home and I rented lunch several years ago. And so it's typically pretty good. I wouldn't expect dramatically different unit economics because it was launched.
Thank you.
Great. Thanks for taking the question Daniel one down a little bit more on life insurance. And in the letter you talked about launching it based off needs versus the regulatory framework. So maybe a follow-up to Jason's questions in terms of sequencing just talked to us about what your research is telling you with the launch of life life life comes first, and then you know, what what your research is telling you in terms of what your users are asking for, and then you mentioned a few times and show you mentioned about abandoning bed. That's Based on data. Just what the process is about Katie. I'm in time lines is set to make these decisions has as you know, we do some newer verticals launched into the recording now. Thank you.
Thanks for that. Yeah, we did we did the location with a little bit in the shower as well though. We I think the sub head of the thoughts about life. Sometimes launching products seems the best Market researched and what I what you mean by that is that is data out there about term life insurance. I gave some indications that while you think the agent stage triggers that that result in the purchase of phone insurance could also be good for life insurance. But honestly, we're approaching life insurance and a little bit more cautious with the painter out. There is next to the market is clean dust, you know hundreds of billions of dollars going to trillions of dollars and the warming of geology of our homeowners customers do summer time like insurance and we just assume have been pay it to us and there's a very sizable payments for the prizes that you were going for and of convention will have I think by the time we want.
Indian customers that you can Market to internally which also speaks to Jason's question about cost of acquisition and some of those other Dynamics and hold from the optic store is coming together nicely back said you'll be up in a little bit cautious simply because we've seen others struggle in this Arena and for our thinking you and I'm like
Placing these kinds of threats but real cats are glass ceilings on on how much you can trust or or bean from market research. So we do speak to customers we get in cars with customers legal research that and yet my honest answer to you is that we really don't know if this is going to stay out of what kind of speed it will play out what kind of them closer to that declaring Victory before the right to do sir.
The one other thing that I want one more piece, one of the really nice things about gets launched and some of the other things that we're doing as well is that all back in seventies, but they're not that the company moves the risks that we take you actually very modest because we are leveraging off already done. All the technology is all of the grinding all of the user experience all of the support staff the licenses and the install base. So it's really a question of getting leverage of using a phone that was already paid for for more and more and more products life is very much been launched in that way. Some exciting things has to be able to start to use other people have bought four gas mileage and just lay on top of it to new products. So it is a bet. Everything model fantasy with tremendous outside. We like those kinds of things and expected return on the expected value of that kind of grass.
Incomplete. That's great. Thank you, Daniel.
today
Hey guys, just two questions. So it looks like we're generating the highest gross profit per customer yet in a company history. So congrats on that. Can you just talk about how retention and CAC trended versus your plan? And if LTE the cat continued to improve should we expect you to lean back in and crank up the marketing a bit more in the future? And the second question is as a California resident Thursday. Our seasons was pretty rough out here. Can you just remind us how the partnership with with Palomar works? Are you guys underwriting renters and homeowners in California or or are they doing it on your behalf? Just remind us how the California Arrangement works. Thank you.
Sure. So the California is essentially all us for for this purpose do have earthquake coverage available through, but the vast majority of the cover engine and environmental but that's all eliminate. So Works were exposed but clearly by the really strong performances loss ratio were off the other questions. I think maybe hit retention first. So retention is stolen and modestly up is how I would probably turn it. So if you look at the you're wanting your to retention levels that you disclose or specifically since we've gone home, but those are steady and stable style of attention and internal sort of long-term members of the computer is starting to look somewhat more positive that takes a while to filter through the system, but I think they had log
Harry's nothing, too.
You know really kind of a year of uncertainty. So I think that's definitely part of our consulate and how we're spending and how we're guiding and and how we're heading before the court reporter and off the next year under marketing question. I think I think the way you put his exactly right leaning in and exactly how we think about it. So if you look over the past two quarters or wage orders, if you include free public or at least in cost savings or equal Improvement, you send it to reinvest, you know, with the exception of the kind of April working really uncertain that's been the office of operation. I expect to continue that into for it's a little more seasoned really light but regardless of that I think will continue to Tulum in we're not giving guidance for next year at this point, but I think the best guide for a future approach is what we've done in the past and for many quarters in a roll
Now it's more investment more investment when you have more confidence and spending more as long as you get the calculations or or steady or trying to improve to do that.
Thank you. I'm just hoping you could comment a little bit on you know, kind of Lessons Learned. I mean, it seems like things are going. Well. What what a surprise you and I'm kind of how can you take those lessons and decide to whether it be going to life insurance or what else might be out of us?
Sure.
It's it's been 3 months and the 30 months have been a very positive surprise and one of the things that email with insurance products would have taken off to do the market research live and you learn the lessons and post-launch grab them. So we try to do a Deliverance before I will never really know until you go out and and encounter the customer you're very excited about the pet insurance product. It is unlike some of the other categories we have home and rent and life for that matter where penetration is very high wage growth under penetrates Market something like 99% of customers. In fact parents don't have pets Insurance off anything's possible tomorrow about growing and it's real opportunity for us and we can kind of vacant some kind of blue ocean and going there anything from scratch what the health insurance should look like wage.
What should cover what the experience would be what the response time should be able to bring some of our thinking be under need everything from the ground after rewrite the policy from scratch and the coverage did all in-house work with relations with all the technology Etc. I'm sorry source of great pride. I think it's it's one of our finer moments. When you. In this product and everything that would learn to walk in five years imported into the design and he's experienced under a customer support and and the underwriting haven't really came together. Beautifully. I think life is Melanie that all that seems to be rewarded with who bought a lot of interests tremendous efficiency beyond our expectations exactly what to expect them because a lot better, but the really nice thing is to see the life cycle Story come together just like graduations be able to see that dead.
Forty percent of the people buying this private insurance as a new customer.
In time you settled tools to acquire new set of customers who otherwise would have got to and and that once we got to those customers to Anatomy that was unavailable service rep about 5% of them within a matter of weeks added a homeowners or renters policy. So we we think that the fourth of the cross out of the different product of being able to solve a new points of Entry to the company and then one to the other and the Dynamics for existing customers that actually comprise the majority of our pets and bought a policy owners not even more dramatic thing than increase their premium at the median increase in premiums was 400% or just shy of four hundred percent. So all in all I am very very good about the way perhaps played out and just hope that it both continued to go to directory that it's on and what we can replicate it with product to come.
If I could get some clarification just with the life insurance launch just want to confirm when you say you will be underwriting it that you just purely acting in an agency capability will be retaining any risk wage, obviously controlling customer experience and marketing and all those sorts of things. That's exactly like the user experience would be very much eliminate experience. But the underlying underlying policy would be on somebody else's paper to the consumer. This would be largely transparent issue. Yeah exactly. What you just described I agree box is enough alarm.
I have a question today.
Great. Thank you, Daniel. I'll talk to get a little bit further into graduation to the extent that the urban Exodus wasn't a negative for the printers business. Could it have been a positive for your thoughts on this business? Did you see any signs of lemonade renters customers and cities moving out to become lemonade homeowners customers.
Good morning. I don't have any data to support or debunk that Visas. So I really can't walk in at 10, if you know something that I don't but I I couldn't confirm or deny that I just don't know.
And then on the life insurance side of things, you know, just to the extent that you're you know that you're that you've gone in this direction of opening up your customer base to block other insurers. Is this something that you could see yourself quickly doing on a commissioned agency basis, in other areas of of what the antenna cattle categories maintaining a limited kind of eliminated wage experience that you're using this type of model to just very quickly add Auto and all the rest of the categories and it you know much faster speeds faster Pace than that, maybe might otherwise
Let me show you how we think about these things. This is actually something mentioned in the call earlier. So for example, earthquake insurance being in California now, so it's not written on our paper all be able to swap that from to our technology and the consumer would be give a very seamless integrated experience Thursday. We have already been doing that. So in some categories we feel those and what a great fit between the kinds of risks that we want to retain or the kind of user experience with those involved. So for example, term life insurance is a product with very thankfully very rare claims experience and the claims home and tell them when they happen to talk to the passing of the policyholder. So unlike the high-frequency trains or patched and home and renters. This is one of those low frequency, very low wage.
I need to interact with the control the planes experience and also dealt with a doubt and justification of that the claims experience because Life policies are involved with a death certificate.
So there's radial a room for for arguments that so for us that made a lot of sense to partner with somebody where the underlying risk-informed program but we control of the user experience we can offer the kind of level of experience that you want. I'm not sure that that will apply across the board and there's really ask you a question about a car insurance auto insurance is related to answered by asking the question. I asked to give the consumer the best experience that we want them to have and that they come to a certain limited Grand and often times. The answer is the case with person trying to mediate ourselves the existing infrastructure all the dependencies on encumbrance encumber experience extended waiting for a comfortable with and and that's really the prism through which of the Middle East which we decide to do outside.
I was watching today.
Good morning. I'm curious if there were any changes in the ways your new customers nice policy that are mixed up. I think any changes in the ways of your customers were required. I think there's some third parties of showed that the app downloads might have been down a little bit. You can tell me if that's incorrect. Maybe you saw a migration to to the the desktop.
Yeah, so a two-part question for the short answer is no no real real real change an immense amount of change of life by day. But if you look at the over the course of the month of the quarter a consistent theme of optimizing key channels and and finding the best return or agnostic in terms of geography facts about you know, what states are regions or even the countries for that matter. We kind of go where the retirements and that was substantially unchanged on the app download question. But if you a question cuz it can indicate something that's actually not happening. And so the way that our system works from time to time it changes life in terms of What proportion of customers choose to download the app or need to download the app and the actual shift around reasonably significantly over the past few quarters as we made some different changes dead.
So it does not really indicating that linear way the growth the downloads for someone less intentional that we made optimize customer experience works. And so can you cheat in Decatur but it's not a great measure of the of the overall growth trajectory seen and are a Geiko view. I think of what we expect not to be over the coming quarter and you will see that the download number shifter out of it is intentional condition.
okay, because I guess
It's just lastly. I'm just tell us who is will be underwriting the life insurance policies.
That's not something that's disclosed at this point. Thank you.
Is that adding life insurance that you know so much about how much do you think about timeline for the the auto insurance policies that more for near-term or or longer-term priority?
So we don't practice is not to disclose timing until we dispose. I think you know, you saw that practice with the with the launch our past month. We met, you know, a truck sent today or our plans upcoming times for you up. And for Life Auto is clearly a a market that's important to our customers and and critical to the long-term Vision. We want to provide everything that our customers can even unlike other types of coverage. Everybody drives has auto insurance. And so it's kind of a a known quantity in terms of potential market for us. So what we're not we can save time on today. I think it's fair to say that as important as you believe it is to a customer.
great great job as an agent, you know, can you just talk with some of the questions for that and you make to add additional products what was going to figuring out, you know, if she said of owning the biography so
yeah, so it's Daniel jump from 2, but it's a combination of things. So when is the product takes time to build some longer than others down to build up at the level of customer engagement and and customer Delight? That is our standard. Uh, and so we factor that in we have a home business that we're trying to build it a smart way with a solid and principal loss ratio. So that is something like a comfortable performing enter and then we look up the potential partner structure. And if we believe there's a way to get a quality product to our customers at a level of that. We could just a plus when I'm looking the partners there does there's a Time Factor also from a regulatory standpoint from on something that's under written by us as opposed to the apartment. So I would say switch off.
If we can leverage apartment and that inclusive of those are really the factors that we thought about in life calculus overtime. Our platform is still pretty we can adjust them. But at the moment this is really a good mixture.
So Palomar was really our test case and a very modest level life would be uh, we hope and and will be more significant and then we'll send them. So they're pretty similar way. I don't watch additional products.
But just to have that there's one other consideration that you should be aware of which is that insurance company wage insurance companies in New York. I mean the United States they are P&C insurance carriers and actually to write Life policies on your own paper. We would have to stand up another Internet carrier and capitalize it's independently so that those considerations in addition to the other ones. So we do think that the real differentiation that we can bring in life is not going to be all the settings claims of these products the planes experiences a massive differentiation and some of them underwriting but he's a very long lead items and Rising as well. So we think the big differentiation he is going to be user experience and off this when we want the product you understand why and you can achieve all of that without standing up and insurance carrier. So that's that's one other thing to bear in mind. So I interrupted you probably want to come in with something else.
Another question for me this in terms of customer acquisition seen a nice Improvement. We talked a little bit about what what drove wage level of efficiency customer acquisition.
It's it's not really a silver bullet answer. We've got, you know, a bigger smarter than we had a year ago. And that was about a year ago the prior-year, you know seasonality factors mean if you look at the amount of growth of generated my opinion free versus the date actually almost identical to what we saw a year ago. Now the ins and outs are very different there there. But again, it's over the course, of course, it's quite a month prior course, we're getting a little bit better at each of the little pieces. So if you look at our creative today versus the year-ago if you look at the customer fit and the reaction from customers have always been super strong, but we just get a little bit better every day. And if you add those up over time that has shown in combination to just show any of those to show off.
Improvement there's a lot of data behind what we're doing and so we're not only getting better at what the customer sees and feels and and and reads but we're getting better about what the top of the funnel looks like how to recognize folks for the waitress to bring through the tunnel and that just helps with every step of it helps you better conversion of that are you know ratios of birth of policy for the top of the funnel and it tends to feed on itself. There's probably better word of mouth, you know, there's more people, you know, having two million customers before too long. There's a lot of folks you've now heard of lemonade wage compared to a year ago or two years ago absolute terms of number, but relatively that that's probably also becoming a stronger driver of the month to acquire customers. And then the last thing I added becoming quite a few others so much as customers with a great opinion of ourselves. Yep.
But if you look at that when it's JD Power or whether it's clear sure ads or other customer reviews, whether it's at the App Store, you usually consists of improvement over time. Your measures couldn't Patrick's Pub top of the market. I think it's really
a combination of all of those things
Perfect. I think in any questions great. Thank you. So looks like you've answered all the questions so I can pull it up here great to have everyone participating some questions and we'll wrap it up here and say thank you very much, and we'll see you.
Thank you, sir.