Nice analysis. For your unit economics calcs, their retention isn't 75%. That figure excludes customers that the company churns. When you include those figures into retention, the Year 1 retention is 62% and the overall 2 year retention is 44%.
Thank you, I have read through your analysis as well and think it has a lot of interesting points.
Regarding retention, I chose to not incorporate regulatory or underwriting risk driven cancellation to capture demand driven cancellations only. I expect as time goes on and Lemonade's capital increases & they fine tune the underwriting model / better price risk, these Company forced cancellations will decrease, as they have the past two years.
I'd be interested to know what % of customers transfer to a competitor vs. not needing the renters / homeowners product anymore.
I do agree with you, however, that this lowers their implied customer lifetime even further, and by extension unit economics.
See here in the Customer Retention section for more details: https://www.meritechcapital.com/blog/lemonade-ipo-s-1-breakd...