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Unpaid Loss and Loss Adjustment Expense
 12 Months Ended
Dec. 31, 2024
Insurance [Abstract]  
Unpaid Loss and Loss Adjustment Expense Unpaid Loss and Loss Adjustment Expense
The following table presents the activities in the liability for unpaid loss and loss adjustment expense (“LAE”) as of December 31, 2024 and 2023 ($ in millions):
December 31,
2024 20232022
Unpaid loss and LAE as of January 1$262.3 $256.2 $97.9 
Less: Reinsurance recoverable(1)
120.2 124.6 72.7 
Net unpaid loss and LAE as of January 1142.1 131.6 25.2 
Add: Incurred losses and LAE, net of reinsurance, related to:
Current year287.0 286.2 170.5 
Prior years(10.0)(5.8)(3.2)
Total incurred277.0 280.4 167.3 
Deduct: Paid losses and LAE, net of reinsurance, related to:
Current year195.4 189.4 106.9 
Prior years74.9 80.5 30.1 
Total paid270.3 269.9 137.0 
Unpaid loss and LAE, net of reinsurance recoverable acquired from Metromile— — 76.2 
Unpaid loss and LAE, net of reinsurance recoverable, as of December 31
148.6 142.1 131.6 
Reinsurance recoverable as of December 31(1)
149.5 120.2 124.6 
Unpaid loss and LAE, gross of reinsurance recoverable, as of December 31$298.1 $262.3 $256.2 
(1) Reinsurance recoverable in this table includes only ceded unpaid loss and LAE.
Unpaid loss and LAE includes anticipated salvage and subrogation recoverable.

Considerable variability is inherent in the estimate of the reserve for losses and LAE. Although management believes the liability recorded for losses and LAE is adequate, the variability inherent in this estimate could result in changes to the ultimate liability, which may be material to stockholders' equity. Additional variability exists due to accident year allocations of ceded amounts in accordance with reinsurance agreements, which is not expected to result in any changes to the ultimate liability. The Company had favorable development on net loss and LAE reserves of $10.0 million and $5.8 million as of December 31, 2024 and December 31, 2023, respectively. No additional premium or returned premium have been accrued as a result of prior year effects.
For the year ended December 31, 2024, current accident year incurred loss and LAE included $3.5 million from Hurricane Helene and $4.0 million from Hurricane Beryl. The net incurred loss and LAE from Hurricane Helene and Hurricane Beryl as of December 31, 2024 represents the Company's best estimates based upon available information.

For the year ended December 31, 2023, current accident year incurred loss and LAE included $10.4 million of net incurred loss and LAE from winter storm Elliott and $4.2 million from the hail storm that impacted customers in Texas. The net incurred loss and LAE from winter storm Elliott and hail storm that impacted customers in Texas as of December 31, 2023 represents the Company’s best estimates based upon available information.

The Company compiles and aggregates its claims data by grouping the claims according to the year in which the claim occurred (Accident Year) when analyzing claim payment and emergence patterns and trends over time. For the purpose of defining claims frequency, the number of reported claims is by loss occurrence and includes claims that do not result in a liability or payment associated with these claims.
The following is information about incurred and paid loss development as of December 31, 2024, net of reinsurance, as well as cumulative claim frequency and the total of IBNR liabilities included within the net incurred loss amounts. The Company separates home and renters claim experience from its pet claim experience when analyzing incurred and paid loss and allocated loss adjustment expenses, as there are distinct differences in the development and claim count emergence patterns. The information about incurred and paid claims development for the years ended prior to December 31, 2024 is presented as unaudited supplementary information.

Home and Renters Incurred loss and allocated loss adjustment expense ("ALAE"), net of reinsurance
The following table presents incurred loss and ALAE, net of reinsurance, as well as IBNR loss reserves, net of reinsurance, and the number of reported claims ($ in millions, except for number of claims):
        December 31, 2024
         Cumulative
Number of
Reported Claims
Accident YearDecember 31, 
201620172018 2019 2020 2021 20222023
2024
IBNR (2)
(unaudited)(unaudited)(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)(unaudited)  
2016 (1)
$— $— $— $— $— $— $— $— $— $— 8
2017— 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.6 — 1,759
2018— — 15.0 13.5 13.4 13.4 13.4 13.4 13.4 — 10,534
2019— — — 46.0 46.1 46.3 46.3 46.1 46.2 — 19,507
2020— — — — 53.0 51.5 51.5 52.4 52.4 — 30,349
2021— — — — — 59.4 55.9 58.4 58.6 0.2 53,497
2022— — — — — — 96.5 92.6 93.8 1.7 55,977
2023— — — — — — — 143.2 136.5 8.2 60,623
2024
— — — — — — — — 154.7 45.7 64,072
Total incurred losses and ALAE, net$557.2 $55.8 296,326

(1)    Amounts in accident year 2016 for the years ended December 31, 2016, 2017, 2018, 2019, 2020, 2021, 2022, 2023 and 2024 were less than $0.1 million, respectively.
(2)    IBNR, net of reinsurance as of December 31, 2024 for accident years 2016, 2017, 2018, 2019, and 2020 was less than $0.1 million.

Home and Renters Cumulative paid loss and ALAE, net of reinsurance
The following table presents cumulative paid loss and ALAE, net of reinsurance ($ in millions):

Accident YearDecember 31,
201620172018 2019 2020 202120222023
2024
(unaudited)(unaudited)(unaudited) (unaudited) (unaudited) (unaudited)(unaudited)(unaudited)
2016 (1)
$— $— $— $— $— $— $— $— $— 
2017— 1.6 1.7 1.7 1.7 1.7 1.7 1.7 1.7 
2018— — 13.2 13.3 13.4 13.4 13.4 13.4 13.4 
2019— — — 36.4 46.1 46.3 46.3 46.2 46.2 
2020— — — — 43.1 50.2 51.3 52.0 52.1 
2021— — — — — 37.8 53.4 56.7 57.8 
2022— — — — — — 52.7 85.5 90.7 
2023— — — — — — — 88.9 122.3 
2024
— — — — — — — — 89.1 
Total paid losses and ALAE, net$473.3 
Total unpaid loss and ALAE reserves, net$83.8 
Ceded unpaid loss and ALAE
109.3 
Gross unpaid loss and ALAE
$193.1 

(1)    Cumulative paid loss and ALAE, net of reinsurance related to accident year 2016 was less than $0.1 million during the years ended December 31, 2016, 2017, 2018, 2019, 2020 , 2021, 2022, 2023, and 2024, respectively.
Average annual percentage payout of accident year incurred claims by age, net of reinsurance (unaudited supplementary information)
Year 1 Year 2 Year 3
Home and renters75 %18 %7 %

Pet Incurred loss and allocated loss adjustment expense, net of reinsurance
The following table presents incurred loss and ALAE, net of reinsurance, as well as IBNR loss reserves, net of reinsurance, and the number of reported claims ($ in millions, except for number of claims):
     December 31, 2024
      Cumulative
Number of
Reported Claims
December 31,  
Accident Year 2020 20212022
2023
 
2024
IBNR
 (unaudited) (unaudited)(unaudited)(unaudited)   
2020$0.7 $0.6 $1.0 $0.6 $0.7 $— 20,873
2021— 10.0 9.7 9.5 9.5 — 196,787
2022
— — 27.4 25.3 25.2 — 375,659
2023
— — — 51.9 48.9 — 510,045
2024
— — — — 72.3 3.7 668,809
Total incurred losses and ALAE, net$156.6 $3.7 1,772,173

Pet Cumulative paid loss and ALAE, net of reinsurance
The following table presents cumulative paid loss and ALAE, net of reinsurance ($ in millions):

December 31,
Accident Year
 20202021 
2022
2023
2024
 (unaudited)(unaudited) (unaudited)(unaudited)
2020$0.4 $0.6 $0.7 $0.7 $0.7 
2021— 7.6 9.4 9.5 9.5 
2022
— — 21.8 25.1 25.1 
2023
— — — 45.8 48.9 
2024
— — — — 67.6 
Total paid losses and ALAE, net$151.8 
Total unpaid loss and ALAE reserves, net$4.8 
Ceded unpaid loss and ALAE
6.2 
Gross unpaid loss and ALAE
$11.0 

Average annual percentage payout of accident year incurred claims by age, net of reinsurance (unaudited supplementary information)
Year 1 Year 2 Year 3
Pet99 %1 %— %
Car Incurred loss and allocated loss adjustment expense ("ALAE"), net of reinsurance (1)
The following table presents incurred loss and ALAE, net of reinsurance, as well as IBNR loss reserves, net of reinsurance, and the number of reported claims ($ in millions, except for number of claims):

     December 31, 2024
      Cumulative
Number of
Reported Claims
Accident Year
December 31,
 
 20162017201820192020 20212022 2023
2024
IBNR
 (unaudited)(unaudited)(unaudited)(unaudited)(unaudited) (unaudited)(unaudited) (unaudited)  
2016 (1)
$1.6 $2.0 $1.7 $1.7 $1.7 $1.8 $2.0 $3.4 $3.3 $— 1,628 
2017— 28.6 30.0 30.2 31.4 32.3 32.5 38.0 38.1 — 29,056 
2018— — 31.4 29.7 31.9 31.8 33.9 38.6 42.1 0.2 44,103 
2019— — — 24.2 24.9 23.2 24.6 33.2 31.6 0.6 51,136 
2020— — — — 10.8 12.0 11.8 16.7 15.4 1.0 37,324 
2021— — — — — 75.3 75.3 86.8 84.7 3.0 43,113 
2022— — — — — — 83.1 92.0 92.3 8.3 46,776 
2023 (2)
— — — — — — — 79.1 81.1 10.0 39,118 
2024 (2)
— — — — — — — — 51.2 17.1 26,994 
Total incurred losses and ALAE, net$439.8 $40.2 319,248 

(1) Table above retrospectively includes Metromile's historical incurred accident year claim information for periods presented.
(2) Includes Lemonade Re SPC incurred accident year claim information.
Car Cumulative paid loss and ALAE, net of reinsurance (1)
The following table presents cumulative paid loss and ALAE, net of reinsurance ($ in millions):

December 31,
Accident Year201620172018 20192020 202120222023
2024
(unaudited)(unaudited)(unaudited) (unaudited)(unaudited) (unaudited)(unaudited)(unaudited)
2016$0.2 $1.2 $1.5 $1.6 $1.6 $1.7 $1.9 $2.2 $3.3 
2017— 17.3 24.3 28.1 30.1 30.8 31.7 24.6 38.3 
2018— — 16.8 24.4 28.2 27.6 30.2 25.1 41.7 
2019— — — 13.5 18.7 14.5 18.8 22.3 30.7 
2020— — — — 5.2 (0.9)5.6 15.0 14.0 
2021— — — — — 38.4 58.9 77.1 80.2 
2022— — — — — — 45.4 74.0 81.4 
2023 (3)
— — — — — — — 43.2 58.4 
2024 (3)
— — — — — — — — 31.8 
Total paid losses and ALAE, net$379.8 
Total unpaid loss and ALAE reserves, net (2)
$59.6 
Ceded unpaid loss and ALAE
$34.1 
Gross unpaid loss and ALAE
$93.7 

(1) Table above retrospectively includes Metromile's historical paid accident year claim information for periods presented.
(2) Includes the fair value adjustment on insurance contract intangible liability of $1.6 million.
(3) Includes Lemonade Re SPC paid accident year claim information.

Average annual percentage payout of accident year incurred claims by age, net of reinsurance (unaudited supplementary information)
Year 1 Year 2 Year 3
Car54 %26 %20 %
The reconciliation of the net incurred and paid loss information in the loss reserve rollforward table and development tables with respect to the current accident year is as follows ($ in millions):
December 31, 2024
Unpaid Loss and ALAE, net
Home and renters$83.8 
Pet4.8 
Car60.0 
148.6 
Reinsurance recoverable on Unpaid Loss and ALAE, net
Home and renters109.3 
Pet6.2 
Car34.0 
149.5 
Unallocated LAE— 
Gross Unpaid Loss and Loss Adjustment Expenses$298.1 
Statutory Financial Information
U.S. state insurance laws and regulations prescribe accounting practices for determining statutory net income and capital and surplus for insurance companies. In addition, state regulators may permit statutory accounting practices that differ from prescribed practices. Statutory accounting practices ("SAP") prescribed or permitted by regulatory authorities for statements of the Company's insurance subsidiaries are (a) policy acquisition costs are expensed as incurred under SAP, whereas they are deferred and amortized under GAAP, (b) certain assets are not admitted for purposes of determining surplus under SAP, (c) investments in fixed income securities are carried at amortized cost under SAP, whereas such securities are carried at fair value under GAAP, and (d) the criteria for recognizing net deferred tax assets ("DTAs") and the methodologies used to determine such amounts are different under SAP and GAAP.
Risk-based capital (“RBC”) requirements promulgated by the National Association of Insurance Commissioners require property/casualty insurers to maintain minimum capitalization levels determined based on formulas incorporating various business risks of the insurance subsidiaries.
LIC’s statutory capital and surplus amounted to $195.1 million and $135.3 million as of December 31, 2024 and 2023, respectively. LIC’s capital and surplus exceeded its authorized control level RBC of $33.8 million and $32.5 million as of December 31, 2024 and 2023, respectively.

MIC’s statutory capital and surplus amounted to $25.2 million and $30.0 million as of December 31, 2024 and 2023. MIC’s capital and surplus exceeded its authorized control level RBC of $4.8 million and $6.3 million as of December 31, 2024 and 2023, respectively.

Statutory Dividend Restriction

The payment of dividends by LIC is restricted by state insurance regulations. Under New York insurance law, LIC may pay cash dividends only out of its statutory earned surplus. Generally, the maximum amount of dividends that LIC may pay without regulatory approval in any twelve-month period is the lesser of adjusted net investment income or 10% of statutory policyholders' surplus as of the end of the most recently reported quarter unless the NYS Department of Financial Services, upon prior application, approves a greater dividend distribution. Adjusted net investment income is defined for this purpose to include net investment income for the thirty-six months immediately preceding the declaration or distribution of the current dividend less any dividends declared or distributed during the period commencing thirty-six months prior to the declaration or distribution of the current dividend and ending twelve months prior thereto. As of December 31, 2024 and 2023, LIC was not eligible to make dividend payments.
The payment of dividends by MIC is restricted by the laws of the State of Delaware. The maximum amount that can be paid without prior notice or approval is the greater of 10% of policyholders’ surplus as of the preceding December 31, or net income not including realized capital gains for the twelve-month period ending the preceding December 31. Because the Company has an unassigned deficit at December 31, 2024 and 2023, MIC’s dividend policy is governed by Section 5005(B) of the Delaware insurance code whereby a domestic insurer may not declare or pay a dividend or other distribution from any source other than earned surplus without the commissioner’s prior approval. MIC paid no dividends to the Company in 2024 and 2023.