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How many of you remember the soda called Tab? It was, and probably still is, one of my favorites, even after it was discontinued in 2020. It was a frenzied success until one day in 1969 it was associated with the sweetener cyclamate to cause terrible diseases in mice and was banned. Overnight, its market presence catered. Coca-Cola then reformulated Tab with only saccharin as a sweetener, and voila it became the leading diet soft drink until the 1980s, even though it survived a similar controversy with saccharin.

This story is similar to the rise and fall of the Insurtechs. Some, like Lemonade, had meteoric rises in stock valuations only to cater when ‘bad’ news came out. The question I posit — is Metromile the artificial sweetener Lemonade needs to recreate its market appeal?

Metromile 2021 Results

Metromile today announced its full-year 2021 results, and there are some results that look like Metromile is on track. Direct written premiums rose 10% from $100 million in 2020 to $111 million in 2021. At the same time, the average premium per policy rose 6.6% from $1,111 in 2020 to $1,184 in 2021.

Winning the car race requires more than increasing the fan base and revenue from advertising. You need a well-trained support team in which everyone delivers 110%. Coca Cola had that with Tab. They fully understood their product and their fan base.  They were able to react quickly and restore consumer confidence and profitability of their product.

Metromile appears to have lost the trust of its customers, with one-year retention rates of 60% for policies that have completed their second term, meaning that 4 out of 10 customers leave after their second term. Extrapolating, this gives an even worse picture of customer retention and support. Therefore, more money needs to be spent on marketing and customer acquisition to maintain their customer base. Indeed, marketing spending rose 206% from $14 million to $42.9 million in 2021.

Metromile and Lemonade Combined

So, what does that mean for Lemonade? Last week I reported that the net losses of Lemonade accelerated, and revenue did not keep pace. If I look at the combined data of Lemonade and Metromile, while spending exceeded half a billion dollars, the increased revenue meant a plateau of net losses for the combined company. Is that a win? Not really. The net losses exceeded 450 million dollars or about twice the 233 million dollars of combined revenue.

Lemonade and Metromile Combined Results 2021

Mario Andretti, the legendary racing driver, summed up the state of the Insurtech ecosystem. Although the founders all have motivation and determination and commitment to their goals, they are largely lacking in commitment to understanding the insurance product and its economy. As such, they are not able to achieve success. The Insurtechs that are doing better, are the ones that combined Insurance expertise with technology, marketing, and other strengths at the get-go, rather than after they were established and running.

Desire is the key to motivation, but it’s determination and commitment to an unrelenting pursuit of your goal – a commitment to excellence – that will enable you to attain the success you seek.
Mario Andretti, Race Car Legend

Insurtech Lessons Learned

The pain experienced by the Insurtechs when adding insurance expertise to their ethos is similar to that experienced by the established carriers when upgrading their technology and customer / agent-facing stacks. The only difference is that it is much easier to modernize if you have a profitable foundation than to create that foundation on soft ground.

So what can incumbent carriers and Insurtechs learn from this?  Master the basics first, then you can layer on differentiating approaches and technology.


Insurtech Advisors helps regional carriers and agencies to work with the best Insurtechs that will enable you to succeed and continue to meet the needs of your members, employees, and independent agents. We know your business and the landscape of Insurtech. We save you countless hours of wasted time and false starts. Furthermore, we work closely with your team to identify opportunities and goals, then introduce you personally and to the best Insurtechs pilot.

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