Expense RatioLemonade's current expense ratio is far above peers, and it is more reliant on reinsurance, which poses a risk if loss ratios deteriorate.
Market CompetitionSuccess in the D2C auto and home channel requires a low-cost competitive advantage, but Lemonade's current expense ratio is far above peers.
Profitability ConcernsA best-case scenario is needed to justify Lemonade's current stock valuation, as it hasn't yet demonstrated profitability and runs at a higher operating leverage.