$Lemonade, Inc.(LMND)$IPO = $29

Back in 2020, Lemonade launched "proportional reinsurance agreements" which ceded 75% of its premiums to reinsurers in exchange for a 25% "ceding commission" for every ceded dollar. Those agreements enabled Lemonade to pass on some risks related to its policies to reinsurers, but they also caused it to generate lower revenue per customer.

Lemonade's reported revenue excludes those ceded premiums, which can fluctuate sharply each year, so its year-over-year growth rates don't always reflect its underlying growth. Instead, investors should focus on its growth in customers, premium per customer, in force premium (IFP), and gross earned premium (GEP) to see how fast it's actually growing.

During the second quarter, Lemonade's number of customers increased 31% year over year to 1.58 million, its premium per customer grew 18% to $290, its IFP rose 54% to $458 million, and its GEP jumped 60% to $107 million. However, all four growth rates have decelerated over the past year.