Lemonade has sent hearing summonses to part of the employees; however, it is not clear at this stage how many employees will actually be fired


The Insurtech company, Lemonade, is expected to soon release tens of its employees, which represents less than 3% of the company’s total workforce, who are about to be laid off. Sources close to the company informed Insurtech Israel News that these actions aim to streamline the system’s performance and are not cutbacks as claimed in the media.

Meanwhile, the company has sent hearing summonses to its employees, but these have not yet concluded, and as of today, the final number of layoffs remains unclear. Sources emphasize that these personnel reductions are not a result of financial difficulties; in fact, it is quite the opposite. Due to the company’s success in the previous quarter and its goal to maximize profitability by the end of the year, Lemonade has decided to strengthen its workforce by replacing underperforming employees with professionals who are suitable for fulfilling the ambitious goals set by the company.

The company employs a business tactic known as Net Zero Head Count, which means they aim to end the year with the same number of employees they started with, as mentioned earlier, while maintaining profitability. This approach requires a comprehensive evaluation of all teams to determine if the current workforce is suitable for achieving the company’s economic strategy.

One possible explanation for Lemonade’s actions lies in the fact that about a year ago, during the labor market’s recovery after the COVID-19 pandemic, the high-tech industry experienced chaos and intense competition. This situation led companies to compete for employees and even hire individuals who only partially met 80% of the company’s needs.

Now, as the high-tech industry is returning to full function, the labor market allows for more strategic hiring that aligns with systemic needs.

 Lemonade’s revenues grew by 115% in the last quarter

Against the backdrop of the hearing letters sent to the employees, the company published the report for the first quarter of 2023. According to the report, the company’s revenues grew by 115% in the last quarter, reaching $95.2 million, which is approximately $50 million more than the corresponding quarter last year. Additionally, there was a reduction in losses and an 11% improvement in Adjusted EBITDA compared to the same quarter last year.


The report also highlights a 23% increase in the number of customers and a 26% increase in the average premium per customer. As a result, total annual premiums (IFP) experienced a 56% increase, amounting to $653 million, in comparison to the first quarter of 2022. Consequently, the company updated its annual growth forecast to $700-705 million.

Despite a series of CAT events that impacted the insured in the first quarter, the Loss Ratio of payment of claims to income continued to decline, standing at 87% in the first quarter of 2023. This is in contrast to 89% in the fourth quarter of 2022 and 94% in the third quarter of 2022. In the absence of CAT claims, the claims payment to revenue ratio was 72%.

Shai Wininger, co-founder and CEO of Lemonade, stated, “In the third quarter of 2022, we turned a page, and since then, we have been moving in a positive direction towards profitability. We exceeded our expectations and achieved our first-quarter goals while experiencing growth in all areas. Consequently, we have updated our forecasts accordingly. Lemonade operates on the basis of AI, which gradually reduces its underwriting workload. We anticipate significant cost savings in the company’s structure over the next 18 months while enhancing service quality for our investors.”




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