Metromile, Inc.

Metromile reported second-quarter direct earned premium of $27.8 million, up 23% year over year. Policies in force were 95,314, up 2% year over year and roughly flat sequentially, and premium run rate was $113 million, up 22% year over year. One-year retention was 68%. Accident quarter losses were $20.6 million, with an accident quarter loss ratio of 74.2% versus 49.8% a year ago; accident quarter LAE was $4.6 million, or 16.5% versus 7.2% last year; and accident quarter contribution margin was -3.3% versus 28.8% last year. Cash and cash equivalents were $202.6 million at quarter end, down from $221.5 million at the end of Q1. Guidance was reduced. Management now expects full-year 2021 premium run rate of $115 million to $125 million and said the previously forecast $143 million to $176 million premium run rate should be reached by Q3 2022. The company now expects to end 2021 with more than 100,000 policies in force, full-year accident year loss ratio of 70% to 75%, and accident year contribution margin of 0% to 5%.

Dan Preston said Q2 was marked by several unexpected challenges, including weaker-than-expected pandemic-related demand tailwinds, higher cancellations, elevated industrywide severity, and regulatory delays to pricing changes. At the same time, he emphasized that Metromile’s value proposition remains strong, citing average annual savings of 47% and saying the company now has a more robust path to long-term growth. His tone was cautious about near-term execution but confident that the strategic reset, leadership additions, and pricing actions will support sustainable, profitable growth.

Regi Vengalil focused on the quarter’s operating metrics and the revised outlook. He cited direct earned premium of $27.8 million, a 74.2% accident quarter loss ratio, 16.5% LAE ratio, -3.3% accident quarter contribution margin, and $202.6 million in cash and cash equivalents at quarter-end. He also said policy servicing expense was $3.5 million, or 12.6% of direct earned premium, helped by lower bad debt expense, and that the company is now guiding to a 2021 premium run rate of $115 million to $125 million, with loss ratio and contribution margin targets of 70% to 75% and 0% to 5%, respectively.

Analysts pressed on whether state expansion to 49 states by end-2022 was still the goal, and management said it expects to continue filing rapidly in the second half of 2021, with most additional growth arriving in 2022, but declined to give a specific state count. Questions also focused on whether competition in pay-per-mile insurance was changing; Dan Preston said they had not seen a material shift and believed the pandemic had raised awareness of the category. On claims severity, management said elevated severity has persisted into early Q3 and appears industrywide, and on pricing changes, they said the adjustments will be rolled out in a targeted way rather than broadly.