← LMND/Core Insurance Book — Scenario Model
Blue = input assumption|Black = computed

Core Insurance Book — Scenario Model

Current Price
$65
Core Insurance Book Component
$38/sh
Market Implies
52% chance of upside scenarios
28% collapse probability

Scenario Overview

ScenarioEV$/shProbRevenueLoss Ratio %Combined Ratio %FcfKey Gate
mega bull$15B$1517%scale platform
bull$5B$517%ebitda positive
base$0B$017%reinsurance 20pct
bear($1B)$020%cat event
collapse($1B)$028%capital raise

Gate Milestones

Growth is gated by milestones. Cost step-changes and capability unlocks are tied to specific milestones.

2026
Y1
reinsurance 20pct
Reinsurance cession reaches 20% target
Unlocks: Revenue growth accelerates vs IFP growth
Lemonade IR: cession phasing to 20% by Q3 2026
2027
Y2
ebitda positive
Full-year adjusted EBITDA positive
Unlocks: Institutional re-rating begins
Management target: 2027 full-year EBITDA positive
2028
Y3
gaap profitable
GAAP profitability achieved
Unlocks: Short interest (15-19% of float) potential squeeze
Management target: late 2027 GAAP profitable
2030
Y5
ai moat proven
5+ consecutive quarters sub-55% loss ratio ex-CAT
Unlocks: AI moat narrative shifts from speculation to demonstrated fact
Loss ratio trajectory: 77% -> 62% -> 52% trend
2035
Y10
scale platform
IFP exceeds $7B, platform economics kick in
Unlocks: Fixed-cost leverage at scale; potential licensing revenue
Revenue/employee growing 36% YoY on flat headcount
2030
Y5
cat event
Major CAT event wipes out 2 quarters of improvement
Unlocks: Reinsurance reduction means 3x more retained loss
Swiss Re: CAT losses $148B projected 2026
2027
Y2
cat crisis
Major CAT event under new retention structure
Unlocks: Loss ratio spikes 15+pp, balance sheet stress
Q1 2025 wildfire +16pp spike as precedent
2028
Y3
capital raise
Dilutive capital raise at $30-40/share
Unlocks: Breaks 'no more capital raises' commitment, 15-20% dilution
RBC ratio breach if severe CAT + high retention

Full Year-by-Year Models

Blue = input · Black = computed · Click to expand

Market-Implied Probability Reconciliation

Given these scenario EVs, what probability weights would the market need to assign to produce the current market-implied value of $38/share?

ScenarioCore Insurance EVPer ShareImplied Prob.Weighted Contrib.
mega bull$15B$19317.4%$34
bull$5B$6417.4%$11
base$0B$517.4%$1
bear($1B)$-1320.0%$-3
collapse($1B)$-1727.9%$-5
Total100%$38/sh

Note: These probabilities apply to the core insurance book's contribution to Lemonade equity. Car insurance and AI platform optionality contribute separately. Net cash ($845M = $11.06/share) is additive.

Target contribution: $38/sh. Residual: $0.0/sh.