{"id":18980,"date":"2023-02-28T17:12:00","date_gmt":"2023-02-28T17:12:00","guid":{"rendered":"https:\/\/www.lemonade.com\/blog\/?p=18980"},"modified":"2023-06-28T22:53:17","modified_gmt":"2023-06-28T22:53:17","slug":"lemonade-acquires-metromile","status":"publish","type":"post","link":"https:\/\/www.lemonade.com\/blog\/lemonade-acquires-metromile\/","title":{"rendered":"Why Lemonade Is Acquiring Metromile"},"content":{"rendered":"\n

Within minutes of meeting the Metromile team we knew we were among kindred spirits. Here were digital natives, insurance nerds, and data scientists, all committed to harnessing technology to deliver faster, fairer, and more affordable insurance to consumers. People after our own heart.<\/p>\n\n\n\n

As our discussions progressed, it became evident that the alignment runs deeper: Our companies enjoy a near-perfect overlap of vision and culture\u2014yet have almost zero overlap in products and licenses. Those are the building blocks of a rewarding union.<\/p>\n\n\n\n

Then, of course, there were Metromile\u2019s 49 state licenses, over $100 million of seasoned in-force premium (IFP), and over $250 million of total cash. All manifestly valuable to Lemonade.<\/p>\n\n\n\n

Yet, what made this deal truly strategic is best captured by how Metromile describes itself: \u201ca data science company, focused on auto insurance.\u201d <\/p>\n\n\n\n

Our own auto insurance\u2014Lemonade Car<\/a>\u2014was unveiled last week, and we think you\u2019ll love how it looks and handles. Pop the hood and you\u2019ll see that it’s powered by telematics and architected to learn from the data it generates, so that it gets better at quantifying and underwriting risks over time. Precision pricing is its ultimate destination, and it’s been engineered to go the distance.<\/p>\n\n\n\n

The only downer is that going the distance (at the risk of overworking the metaphor) takes billions of miles, forgiving shock absorbers, and plenty of gas. That\u2019s where Metromile comes in. They have been down this road already, and their proprietary data and machine learning algorithms can transform Lemonade Car by collapsing time, flattening risk, and increasing efficiency.   <\/p>\n\n\n\n

1. Collapsing Time<\/h3>\n\n\n\n

While Lemonade has been at the forefront of using big data and AI in home and pet insurance, Metromile was busily trailblazing a parallel path for car insurance.<\/p>\n\n\n\n

Ten years ago, Metromile pioneered the use of continuous real-world data feeds to derive high fidelity predictions for losses per mile driven<\/em>. It is this decade-long head start, in combination with the Lemonade tech stack, that holds the promise of boosting Lemonade Car to the vanguard of car insurance.<\/p>\n\n\n\n

Metromile\u2019s car-mounted precision sensors have taken over 400 million road trips, covering billions of miles and sending real-time streams to the Metromile cloud. These proprietary data were mapped onto behaviors (how much someone drives, as well as when, where, and how they drive) and cross-referenced with actual claims data, enabling these behaviors to be scored for risk with great granularity. You\u2019d be amazed what AI can do with pinpoint data from 1.6 billion hard braking incidents. <\/p>\n\n\n\n

These machine learning models were regularly ported onto ever more precise \u2018forms and rates,\u2019 which were approved by regulators and implemented in the Metromile product, enabling this multi-year cycle to start over. Metromile is on its third generation of models, an achievement that requires not only data science and insurance excellence\u2014but years <\/em>of real-world feedback and iteration at scale.<\/p>\n\n\n\n

All this has far reaching implications:<\/p>\n\n\n\n