Metromile

Carriers are planning for inflationary threats and have been responding to major catastrophes, while the InsurTech and broking markets have driven M&A drama.

The monthly CPI report shows that inflation continues to push severity higher as carriers take rate in response.

Lemonade and Root remain the focal points of short sellers, while Metromile’s stock loan fee rate increases (pending acquisition).

Short interest fell in InsurTechs, but not enough to ease the pressure on the sector.

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 deal derisks its early auto build-out, likely delays its next capital raise and still stands a good chance of delivering InsurTech alchemy.

Lemonade expects that Metromile will be a key to run faster through a competitive auto insurance market while assuming fewer risks on the road.

InsurTech shares trade mixed in response to Lemonade-Metromile combination.

Lemonade CEO Daniel Schreiber told analysts that the Metromile acquisition will put the InsurTech “at the vanguard of car insurance”.

Lemonade’s acquisition of Metromile helps both firms redirect focus from ongoing challenges.

Root and Lemonade remain the highest-shorted stocks covered, as short interest in most firms remains flat in anticipation of earnings.

The move is part of the InsurTech’s efforts to expand its independent agents program.