Net earned premium 25.3
Net investment income 0.9
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Total revenue 26.2
Expense
Loss and loss adjustment expense, net 18.2
Other insurance expense 3.3
Sales and marketing 19.2
Technology development 3.5
General and administrative 18.2
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Total expense 62.4
Loss before income taxes (36.2)It's somewhat worse than average, but trending in the right direction. Will give a qualified "OK".
> Sales and marketing at 19.2 seems a bit high, but I guess they’re doubling down on growth, and it implies they have a long runway.
It's very high, relative to written premium. You can always buy market share in insurance by increasing commissions and/or increasing marketing, and it's okay to overspend in the beginning for branding/momentum purposes, but it's not sustainable. They raised $500 MM, and spent $200 MM (and much of the remaining $300 MM is needed for statutory surplus) so who knows how much longer they can sustain that.
Administrative and tech I'm somewhat sanguine about, as long as they keep moving upmarket to Homeowners' insurance. Renters' insurance is never going to have a great margin. Tech is at least decent, and hopefully the kernel for expanding easily into other markets.
For those unfamiliar with the combined ratio, taking a stab at an explanation by simplified analogy…
For most normal companies:
For insurance companies: Most normal companies use profitability metrics: Insurance companies use inverted expense ratios: (The above is obviously simplified, for the sake of illustrating by analogy. For instance, insurance companies usually won’t have “Gross income” in their financial statements, and “Operating costs” and “Operating income” are typically called “Underwriting expense” and “Underwriting gain”.)