Insurance coverage firm Lemonade stated late Monday it has agreed to purchase Metromile in an all-stock deal, a bid to jumpstart its auto-insurance enterprise that despatched shares of Metromile surging 7% increased in after-hours buying and selling.
The deal would worth Metromile
at about $500 million, Lemonade
stated. Underneath the phrases of the deal, Metromile shareholders will obtain Lemonade frequent shares at a ratio of 19 to 1.
Lemonade launched its automobile insurance coverage final week, and Metromile’s proprietary knowledge and algorithms “can vault us over essentially the most time- and cost-intensive elements of the journey,” Lemonade’s Chief Govt and co-founder Daniel Schreiber stated in a press release. “In an enormous and aggressive market like auto insurance coverage, at present’s deal is a big unlock of worth for our clients and shareholders.”
Lemonade has been on the forefront of utilizing “massive knowledge and AI in house and pet insurance coverage,” whereas Metromile has gone by way of “a parallel path for automobile insurance coverage,” Lemonade stated.
Metromile’s car-mounted sensors have coated billions of miles, cross-referencing the information streams with claims knowledge and yielding “exact predictions” for losses per mile pushed, Lemonade stated.
The deal is anticipated to shut within the second quarter of 2022, pending regulatory approvals. Shares of Lemonade fell 6% within the prolonged session.