Lemonade, an insurance company that leverages AI technology, has entered into an agreement to acquire Metromile, a digital insurance platform based in the US.
The transaction, worth approximately $500m, is expected to close in the second quarter of 2022, following regulatory approvals. The approval of Metromile stockholders is also required.
Lemonade deploys AI to offer renters, homeowners, pet, car, and life insurance. While Metromile offers real-time, personalised car insurance policies by the mile.
Metromile’s car-mounted precision sensors took over 400 million road trips in recent years, sending real-time streams to the Metromile cloud. These were cross referenced with actual claims data, yielding precise predictions for losses per mile driven. These algorithms, according to Lemonade, hold the promise of propelling Lemonade Car from a newcomer in the car insurance space to its vanguard.
Dan Preston, CEO of Metromile, said, “The data science-driven technology platform we built created fairer and more individualised car insurance for consumers in an industry marred by vast inequities.
“Joining forces with Lemonade Car will create the most customer-centric, fair, and affordable car insurance, and is a great outcome for Metromile shareholders, who will benefit as shareholders of the combined company.”
Under the terms of the transaction, Metromile shareholders will receive Lemonade common shares at a ratio of 19:1.
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