Why Lemonade Stock Popped 12% in June
Yahoo Finance ·
Shares of Lemonade ( LMND +6.58% ) stock jumped 12% in June, according to data provided by S&P Global Market Intelligence . The digital insurance start-up gave shareholders some good news about its reinsurance program. Lemonade set out to disrupt insurance with artificial intelligence (AI) and machine learning long before they became today's catchphrases, and it's harnessing the technology to create a better insurance company. Since it's just over a decade old, it's still building up its business. It's attracting new members at a rapid pace, cross-selling existing customers to bundles and new policies, and edging closer to profitability. Part of developing the business has been working with third-party reinsurers. Reinsurance programs work as "extra" insurance in the case of catastrophes , and in the past, Lemonade has ceded a high rate to its third-party partners to cover the extras. As its economics improve, it has been renegotiating the deals down so it keeps more of the good stuff while retaining the extra coverage.
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