Metromile posts $2.1mn contribution loss as loss ratio swells
Metromile reported a contribution loss of $2.1mn in the third quarter compared with a contribution profit of $4.7mn in the prior-year period, as the loss ratio at the auto carrier continued to swell.
The loss ratio at the pay-per-mile auto insurer grew to 81.6% during the quarter, up from 56.7% at the same point last year, which the carrier attributed to an industry-wide increase in claims severity, as well as claims related to Hurricane Ida.
Excluding catastrophe losses, the loss ratio was 77.2%.
The disclosure followed news last week that Lemonade agreed to acquire Metromile in a $500mn all-stock transaction.
Policies in force as of September 30 came in at 95,238, marginally down on the prior-year period, when it posted a figure of 95,314.
Direct earned premium increased by 6.7% to $28.5mn, with average earned premium per policy up by 6.1%.
Touching on the Lemonade deal, Metromile said the two businesses had “deeply aligned missions and market potential”.
CEO Dan Preston said: “During the quarter, we continued to make progress on and invest in our growth initiatives, and, while our policies in force were largely flat for the quarter ending September 30, 2021, policies in force have now grown for three consecutive months, including October.”
He added: “Loss ratios remained elevated given industry-wide inflation in costs across bodily injury and physical damage.”