<p><strong>Lemonade </strong><span class="ticker-mention inline-flex items-center font-bold">(LMND <span class="ml-1 text-green-900">+1.27%</span>)</span>, an online insurer that streamlines the byzantine insurance-buying process with AI chatbots and algorithms, appears to be a disruptive company. By pulling younger customers away from traditional insurers, it nearly tripled its customer base from 1.00 million to 2.87 million between the end of 2020 and the third quarter of 2025.</p>
<p>Lemonade initially offered only homeowners and renters' insurance, but it expanded into the term life, pet, and auto insurance markets after its 2020 IPO. It plans to grow its in-force premium from $1.16 billion in its latest quarter to $10 billion in the &#34;coming years&#34; as it expands across more states, rolls out additional insurance products, and upgrades its AI capabilities.</p>
<div><img alt="Two friends drinking lemonade in the back of a van." width="880" height="587" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NTU0MzUvdHdvLWZyaWVuZHMtbGVtb25hZGUtdmFuLmpwZyZ3PTM4NDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NTU0MzUvdHdvLWZyaWVuZHMtbGVtb25hZGUtdmFuLmpwZyZ3PTM4NDA"/>
<p>Image source: Getty Images.</p>
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<p>From 2025 to 2027, analysts expect Lemonade's revenue to grow at a 42% CAGR, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turning positive in the final year. With an enterprise value of $5.7 billion, it still looks reasonably valued at five times next year's sales. However, it's still deeply unprofitable and faces significant competition as the larger insurers roll out similar AI-powered chatbots and services.</p>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Lemonade Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0xNTkQucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0xNTkQucG5nJnc9MTI4"/></div><div><h2>NYSE: LMND</h2><div>Lemonade</div></div></div><div><div><div>Today's Change</div><div>(1.27%) $0.94</div><div>Current Price</div><div>$75.20</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$5.5B</div><div>Day's Range</div><div>$73.77 - $75.98</div><div>52wk Range</div><div>$24.31 - $99.90</div><div>Volume</div><div>16K</div><div>Avg Vol</div><div>2.5M</div></div></div></div></section>
<h2>Chubb might be a better alternative to Lemonade</h2>
<p>While Lemonade could keep growing over the next few years, it might be smarter to stick with a mature blue chip insurance company in this wobbly market. <strong>Chubb</strong> <span class="ticker-mention inline-flex items-center font-bold">(CB <span class="ml-1 text-green-900">+0.03%</span>)</span> -- the world's largest publicly traded provider of property, casualty, supplemental, and health insurance -- fits that description. The Swiss company was previously known as ACE Limited until 2016, when it acquired Chubb and adopted its brand.</p><div><div id="foolcom_sidebar_top_container"></div></div>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Chubb Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0NCLnBuZyZ3PTEyOA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0NCLnBuZyZ3PTEyOA"/></div><div><h2>NYSE: CB</h2><div>Chubb</div></div></div><div><div><div>Today's Change</div><div>(0.03%) $0.11</div><div>Current Price</div><div>$331.08</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$130B</div><div>Day's Range</div><div>$331.08 - $335.32</div><div>52wk Range</div><div>$263.14 - $335.34</div><div>Volume</div><div>20K</div><div>Avg Vol</div><div>1.7M</div><div>Dividend Yield</div><div>1.15%</div></div></div></div></section>
<p>Chubb's combined property and casualty (P&amp;C) ratio, which should remain below 100% (indicating its claims don't exceed its premiums earned), came in at just 85.7% at the end of 2025. That's well below the industry average of 96.6% for P&amp;C insurers in the United States. It's also been upgrading its own AI capabilities to keep up with Lemonade and other tech-driven insurers.</p><div><div><div><div></div></div></div></div>
<p>Chubb doesn't disclose its exact customer count, but analysts expect it to generate roughly 43 times Lemonade's revenue in 2026. They only expect its revenue to grow at a 5% CAGR from 2025 to 2027, but it's firmly profitable. Wall Street expects its EPS to increase at 6% CAGR during that period. Its stock still looks like a bargain at 12 times this year's earnings; it pays a decent forward yield of 1.2%; and it has repurchased 15% of its shares over the past decade. So if you're looking for an evergreen, safe-haven insurance play in this volatile market, Chubb would be a much better bet than Lemonade's speculative stock.</p><div id="article_pitch_container"></div><div id="promobox_container"></div>

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<p>Lemonade (LMND) has seen significant growth, tripling its customer base since 2020 and expanding its insurance offerings. Analysts predict a 42% revenue growth CAGR from 2025 to 2027, but the company remains unprofitable and faces competition. In contrast, Chubb (CB), a mature insurance provider, offers stability with a strong profitability ratio and expected revenue growth. Chubb's stock is considered a safer investment compared to Lemonade's speculative nature, making it a better choice in the current market.</p>

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