レモネード（LMND）2026年第3四半期決算説明会：売上高73%増と第4四半期EBITDA黒字見通し

要点

• 保有契約保険料（IFP）は前年同期比34%増の15億5,000万ドルとなり、Lemonadeの成長加速は12四半期連続となった。
• 売上高は73%増の3億3,600万ドルに拡大し、売上総利益は48%増の過去最高となる1億1,800万ドルに達した。調整後売上総利益は49%増の1億2,100万ドルとなった。
• 調整後EBITDA赤字は前年同期の2,600万ドルから2,000万ドルに縮小した。調整後フリーキャッシュフローは2,700万ドルとなり、6四半期連続で黒字を確保した。
• 自動車保険「Lemonade Car」のIFPは前年同期比63%増加した。同商品は現在14州で提供されており、米国人口の半分以上をカバーしている。
• 経営陣は、2026年第4四半期に500万〜900万ドルの調整後EBITDA黒字化を達成し、2027年通期でも調整後EBITDAの黒字化を見込む従来予想を改めて示した。
• 年初来のクロスセル実績は1億ドルを超え、IFP全体の約2倍のペースで成長した。セット契約（バンドル契約）はIFP全体の20%近くに迫っている。

主要財務データ

顧客数の23%増および顧客1人当たり保険料の9%増がIFPの成長を支えた。Lemonadeの当四半期末時点の従業員数は1,321人で、前四半期比で18人減少し、過去4年間で保険料基盤が約3倍に拡大したにもかかわらず、4年前の人員規模を下回った。

事業および業績動向

自動車保険が成長を牽引

自動車保険「Lemonade Car」のIFPは前年同期比63%増加した。直接チャネルを通じた記録的な新規契約と既存顧客への販売が寄与した。直近のミズーリ州、フロリダ州、ペンシルベニア州でのサービス開始により、展開地域は14州に拡大した。

報告された自動車保険の損害率は約63%だった。過年度の有利進展を除くと、損害率は70%台前半から半ばで推移していると経営陣は説明した。新規契約の損害率は依然として更新契約を小幅に上回っているものの、事故発生頻度および1件当たり損害額は概ね想定通りとされた。

Lemonadeの自動運転車向け保険商品は6州に拡大した。テスラ車の所有者における成約率は、自動車保険全体平均の約2.2倍に達した。同社は詳細を明かさなかったものの、テスラ以外にも複数の大手自動車メーカーと積極的な提携・協力関係にあると述べた。

クロスセルの重要性が高まる

Lemonadeの既存顧客に対するクロスセル実績は年初来で1億ドルを突破し、IFP全体の約2倍のペースで成長した。経営陣は、これらの販売には追加の顧客獲得費用がほとんど発生しないと述べた。

クロスセルは、既存顧客層への浸透拡大と新たな州での商品投入の双方から恩恵を受けている。四半期末時点でセット契約の割合はIFP全体の20%近くに迫った。

地域展開の加速

Lemonadeは2026年中に25件の「商品×地域」の新たな組み合わせを展開した。賃貸住宅居住者向け保険（レンターズ保険）は全米で提供可能となり、不動産管理会社など全50州での保障を求める提携パートナーへのアクセス拡大につながる可能性がある。

経営陣によると、「Lemonade OS」の自動化に支えられ、事業全体における2026年の展開ペースは前年以前の約7倍に達したという。

AIと営業レバレッジ

経営陣は、生産性向上、新商品展開、将来の販売チャネルにおいて、「Lemonade OS」とAIネイティブなアーキテクチャが中核であると強調した。同社は外部の個人向けパーソナルAIエージェントへの対応を計画しているが、このチャネルは現時点では有意な取扱高をもたらすには至っていないという。

損失および損失調整費用を除く営業費用は前年同期比36%増、前四半期比で1,000万ドル増加した。成長投資の拡大と支払利息を除くと、費用の伸びは約16%にとどまった。Lemonadeは販売マーケティング投資を増やしたにもかかわらず、LTV/CAC比率を3対1超の水準で維持した。

経営陣の業績予想（ガイダンス）

経営陣の最新見通し（ガイダンスレンジの上限）は以下の通り。

• 第4四半期および2026年通期のIFP成長率：33%
• 第4四半期の売上高成長率：約52%
• 2026年通期の売上高成長率：約67%
• 第4四半期の調整後EBITDA：500万〜900万ドルの黒字
• 2027年通期の調整後EBITDA黒字化

経営陣は、2027年に成長投資の絶対額は増加すると見込むものの、成長投資の増加ペースは2026年第4四半期から大幅に減速すると予想している。同社は、特に自動車保険など高いリターンが見込める成長機会への投資を優先する姿勢を維持していると述べた。

株式報酬費用については、2027年第2四半期に役員向け報酬付与が一巡した後は、前年同期比での費用増加要因にはならない見通しだ。また、ハノーバー再保険（Hannover Re）との新契約によるコスト削減効果もあり、支払利息の増加ペースも時間とともに落ち着く見込みである。

リスクと注目点

• ペット保険は獣医療費の高騰に直面している。Lemonadeは保険料率の引き上げを進めているが、その効果が業績に反映されるまでには数四半期かかる見込みだと経営陣は述べた。
• ペット保険の損害率上昇が、売上高ガイダンスの上方修正が第4四半期および通期の調整後EBITDAガイダンス引き上げにつながらなかった主な要因となった。
• 第3四半期の欧州事業の損害率は高水準となった。自然災害や大規模損害が29ポイント押し上げた。同社は基礎的な引受利益率を改善するため、対象を絞った料率改定を進めている。
• 調整後EBITDAは改善したものの、主に株式報酬費用や支払利息の増加により、純損失は前年同期比で拡大した。
• 自動車保険の急成長や一部での競争力ある価格設定など、事業ポートフォリオの変化により、全体の損害率が小幅に上昇する可能性がある。経営陣は、損害率単体ではなく、売上総利益の絶対額の最大化を重視していると強調した。

アナリスト質疑応答のハイライト

収益性と成長のバランス：経営陣は、第4四半期に収益性が顕著に改善するという過去の傾向が継続すると予想している。Lemonadeは2027年通期の調整後EBITDA黒字化を目指す一方で、創出された余力を高リターンが見込める成長分野に再投資する計画だ。

ペット保険への逆風：獣医療費の上昇によりペット保険の損害率が悪化している。ポートフォリオ全体で保険料率の引き上げを進めており、経営陣は今後数四半期で損害率が落ち着くと見込んでいる。

パーソナルAIエージェント：経営陣は、パーソナルエージェント経由の契約規模は現時点では有意な水準に達していないとしつつも、エージェント間での保険販売は潜在的に重要な戦略的転換点になり得るとみている。詳細は11月17日に開催予定のLemonadeのインベスター・デイで説明される予定だ。

レンターズ保険の全米提携：全米での提供が可能になったことで、全米規模のカバーを求める大手パートナー企業にとっての制約が解消された。経営陣は、提携機会が急激に変化するというよりは、段階的に拡大していくと見込んでいる。

費用の推移：一般管理費（G&A）の増加は、主に支払利息、株式報酬費用、および前年同期の一時的利益の剥落によるものと説明された。経営陣は、一般管理費の前年同期比の伸びが2027年第2四半期以降、大幅に鈍化すると見込んでいる。

決算説明会トランスクリプト全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Hello, everyone. Thank you for joining us, and welcome to the Lemonade Third Quarter 2026 Earnings Call. [Operator Instructions]

I will now hand the conference over to the Lemonade team. Please go ahead.

Unknown Executive

Good morning, and welcome to Lemonade's Third Quarter 2026 Earnings Call. Joining us on our call today, we have Daniel Schreiber, CEO and Co-Founder; Shai Wininger, President and Co-Founder; Tim Bixby, Chief Financial Officer; and Nick Stead, SVP, Finance. A letter to shareholders covering the company's third quarter 2026 financial results is available on our Investor Relations website at lemonade.com/investor.

I would like to remind you that management's remarks made on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent Form 10-K filed with the SEC and our more recent filings with the SEC. Any forward-looking statements made on this call represent our views only as of today, and we undertake no obligation to update them. We will be referring to certain non-GAAP financial measures on today's call, including adjusted EBITDA, adjusted free cash flow and adjusted gross profit, which we believe may be important to investors to assess our operating performance.

Reconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our letter to shareholders. Our letter to shareholders also includes information about our key performance indicators, including number of customers, in-force premium, premium per customer, annual dollar retention, gross earned premium, gross loss ratio, gross loss ratio ex-CAT, trailing 12-month loss ratio and net loss ratio and a definition of each metric, why each is useful to investors and how we use each to monitor and manage our business.

With that, I'll turn the call over to Daniel for some opening remarks.

Daniel Schreiber

Good morning, and thanks for joining us to review Lemonade's results for Q3 2026. This was another excellent quarter, marked by accelerating growth, healthy underwriting performance and continued progress towards profitability. In-force premium reached $1.55 billion, growing 34% year-on-year and extending our streak of accelerating growth to 12 consecutive quarters. Revenue grew faster still, increasing 73% to $336 million, while gross profit increased 48% to a record $118 million. We are particularly encouraged by the growth momentum in our car business. IFP grew 63% year-over-year, and we saw record levels of new business across both our direct channels and sales to existing Lemonade customers. At the same time, underwriting performance continues to be healthy and broadly in line with our expectations.

On the bottom line, adjusted EBITDA loss was $20 million, in line with our expectations, and we remain on track to deliver our first positive adjusted EBITDA quarter in the current quarter and reiterate our expectations that 2027 will be EBITDA positive on an annual basis. We first outlined our expectation of reaching positive adjusted EBITDA in Q4 of 2026 back in 2022. Since then, we've navigated considerable macroeconomic volatility and uncertainty, yet our profitability time line remains unchanged. That is deeply gratifying and indicative of how dependable and predictable our business is. A key driver of this trajectory has been the operating leverage our technology affords us across the business. And I think the clearest illustration of that is our productivity per employee.

We ended the quarter with 1,321 employees, fewer than we employed 4 years ago. Yet over that period, we've nearly tripled our premium base and doubled our customer count. In other words, we're running a business nearly 3x the size with slightly fewer people. That's the compounding benefit of a decade of investment in our proprietary AI platform, and we believe there's considerable more leverage ahead. We're just days away from our Investor Day on November 17 in New York City, where we'll share more about our long-term growth aspirations and the AI capabilities powering our business. I do hope you will tune in.

With that, I'll hand it over to Shai, who will cover a couple of exciting developments across the business. Shai?

Shai Wininger

Thanks, Daniel. One topic we'll dive into more detail at Investor Day is the emergence of personal AI agents, which I believe will fundamentally reshape insurance distribution. We are extremely excited about this long-awaited opportunity to open Lemonade OS to external agents, letting them serve their user directly just as our team would. Customers using personal agents to interact with Lemonade will get instant 24/7 quality service, while we reduce our cost to serve, allowing us to pass more savings back to them. You can read more about our upcoming Lemonade OS update with native support for personal agents at lemonade.com/agentic.

I also want to touch on 2 areas where Lemonade OS supercharged our progress, geographic expansion and autonomous car. First, geographic expansion. 2026 has been a year of accelerated growth on the map with 25 new product geography combinations launched this year alone. Lemonade OS brings levels of automation and sophistication that transform non-engineering tasks that used to take weeks into hours, allowing our team to launch products and enter new markets with increasing speed and less incremental overhead. And I'm pleased to note that we reached a major milestone earlier this week, nationwide availability for our renters product, the first in our portfolio to achieve that with more to come.

We've also seen faster geographic growth in our car business following recent launches in Missouri, Florida and Pennsylvania. Lemonade car is now available in 14 states, covering more than half of the U.S. population. Our car business is also getting better with healthier cohorts, more competitive pricing, new features and exceptional customer service. This is a complex expansion that requires our team to grow and improve the product at the same time. I expect our car expansion to pick up even more speed in the coming quarters.

The second area I wanted to highlight is autonomous car, where once again, Lemonade OS is unlocking velocity we couldn't have otherwise achieved. Since launching the product earlier this year, we've already expanded to 6 states. Early results from our autonomous pricing model continue to be encouraging with conversion among Tesla owners roughly 2.2x those we see with our broader car product.

And with that, I'll hand it over to Tim, who will take us through the financial performance and outlook in more detail. Tim?

Timothy Bixby

Thanks, Shai. Let's start with Q3 results, which were excellent. In-force premium grew 34% year-on-year to $1.55 billion, driven by customer growth of 23% and premium per customer growth of 9%. We added roughly 212,000 new customers in Q3, 20% greater than the roughly 177,000 customers added in the prior year quarter. Within our reported gross loss ratio of 65%, our favorable prior period development of about 2% was driven primarily by our car and renters products. On a net basis, we also saw 2 points of favorable prior period development.

The vast majority of development was not cat related, both on a gross and net basis. Prior year development, which we report on a net basis, was $4 million favorable in Q3 and about $20 million favorable year-to-date. Gross profit increased 48% to $118 million, while adjusted gross profit increased 49% to $121 million for a gross margin and an adjusted gross margin of 35% and 36%, respectively. These metrics use revenue as the denominator. Adjusted gross profit as compared to gross earned premium was 33% in Q3, up 4 points from 29% in the prior year.

Revenue grew 73% to $336 million, while our adjusted EBITDA loss improved about 20% to a loss of $20 million. Notably, revenue grew about 40 percentage points faster than IFP due to dynamics related to our sustained trend of increased premium retention at our reinsurance renewals in recent years. Importantly, adjusted free cash flow was positive for the sixth consecutive quarter at $27 million, while operating cash flow was also positive at $7 million. We ended the quarter with roughly $1.2 billion in cash and investments, of which about $350 million is required to be held as regulatory surplus.

Annual dollar retention, or ADR, increased by 1 percentage point sequentially to 86%. Operating expenses, excluding loss and loss adjustment expense, increased by $51 million or 36% in Q3 as compared to the prior year and by $10 million sequentially compared to Q2. Minus the increase in growth spend and interest expense, expenses were up about 16%. One additional logistical note. We currently have a standard S-3 Registration on file known as a shelf registration, which has a fairly typical 3-year expiration date or term. Ours expires next week. So we plan to renew that shelf with an updated S-3 filing shortly. This is a valuable tool to have at hand as a public company. I will note that we have no immediate plans to utilize it.

And I'll hand it off to Nick, who will take us through some growth and expense drivers in a bit more detail in addition to our guidance. Nick?

Nicholas Stead

Thanks, Tim. I wanted to first highlight a notable growth driver in Q3. Sales to existing Lemonade customers known as cross-sales are becoming an increasingly significant contributor to our overall growth. Year-to-date, we surpassed $100 million in cross-sales, which are growing at twice our IFP growth rate. And we see significant opportunity to drive further IFP growth from our existing customer base over time.

Turning to operating expenses. We continue to see great leverage across our cost structure. While year-over-year comparisons are impacted by certain Q2 expense increases, the sequential comparison provides a clear picture of our underlying expense trajectory. From Q2 to Q3, operating expenses increased by $10 million, and that was attributable to increases in growth spend, related interest expense and other insurance expense. Stock-based compensation was down slightly sequentially and headcount also modestly declined, down by 18 to 1,321. Year-over-year, operating expenses grew by 36%. That was driven by a handful of identifiable factors, most of which we expect to moderate going forward.

Let me briefly unpack the drivers and individual line items. Other insurance expense grew $5 million or 21% compared to 33% growth in gross earned premium. Recall that this line item is largely variable in nature, and it is generally expected to grow at rates not materially different from the top line. Sales and marketing grew by $25 million or 44%, and that was driven by increased growth spend. Alongside that increase, we maintained strong LTV to CAC ratios above 3:1. Technology development expense grew 18%, primarily due to increased stock-based compensation expense and G&A grew by 45%, primarily due to increased stock-based compensation, interest expense and the absence of prior year one-time benefits in the current quarter.

I want to share some thoughts on how we expect these expense growth drivers to impact future results. First, growth spend. We touched on this in the last quarter's shareholder letter, but the growth rate of growth spend is expected to slow significantly in Q4 2026 and onwards. Second, stock-based compensation expense. We don't expect this to be a driver of year-over-year expense growth beginning in Q2 2027 once we lap those executive awards from earlier this year. Third, interest expense growth should moderate over time, benefiting from the reduced cost of our new Hannover Re agreement. And lastly, other insurance expense, which includes those variable costs will continue to grow. So taken together, these insights and drivers reinforce our confidence in continued operating leverage and expanding profitability.

Turning to the bottom line. Net loss was $44 million or $0.56 per share compared to $38 million or $0.51 per share last year. Adjusted EBITDA loss improved to a loss of $20 million from $26 million last year. The divergence in year-over-year performance between the 2 measures largely reflects the increases in stock-based compensation and interest expense.

Let's now look ahead to our guidance for Q4 and full year 2026. We include this in our shareholder letter and our current view represents 33% Q4 and full year IFP growth at the high end of our guidance range, roughly 52% Q4 revenue growth and 67% full year 2026 revenue growth and positive adjusted EBITDA of $5 million to $9 million in the fourth quarter.

With that, I would like to pass it over to Shai to answer some questions from our retail investors.

Shai Wininger

Thanks, Nick. We'll now turn to our shareholders' questions. There were a number of questions around the pace of geo expansion and whether we expect to see the pace of car state rollout accelerate similar to the surge of renters launches in the past few months.

So a few thoughts on this. As a reminder, we launched 3 new car states in the past 90 days, Florida, Missouri and Pennsylvania. So far, in 2026, our launch pace across the business is about 7x faster than in prior years. So we're really seeing the Lemonade OS acceleration take effect. Also, we're not facing a TAM constraint. The states we're live in represent more than half the market, a TAM well north of $100 billion. Our car growth is not constrained by geographical expansion. That said, I expect us to offer all of our products in all 50 states, just as we now do for renters. And I also expect our team to continue and shorten the cycle time to build and launch a new car state.

We got questions about our autonomous product, specifically whether we are working with any autonomous driving or fleet partner in addition to Tesla.

I'm unable to share much about this right now, but I will say that we have multiple active relationships with major carmakers beyond Tesla and expect to see more brands become available in the Lemonade autonomous car product over time.

Lastly, we've gotten some questions about AI in our industry, specifically how our AI native architecture becomes a durable advantage and not just efficiency gains that competitors can copy.

I actually think our advantage is growing in the Agentic era. There is a common misconception here. As individuals, you can install Claude or ChatGPT in minutes. And having that kind of intelligence in your pocket, the value is obvious. Scroll through X, and it looks like everyone is building swarms of agents to run their businesses. But inside large organizations, it's very, very different. Most incumbents run on layers of legacy systems. Many of them were designed before the Internet. They don't build their own core systems. They rely on vendors to innovate for them, and most of their policies aren't sold digitally. So they don't have the data or the signals or the context that AI needs to be truly useful. And driving this kind of change takes a culture and a team that were built for it from day 1. And that's what Lemonade and Lemonade OS is all about.

It was designed from the ground up for autonomous operation. AI agents doing the work, not AI bolted on top of systems built for humans and everything runs on top of deep context. Every quote, every policy, every claim, every customer interaction has been digital from day 1. So our agents don't just see a task, they see the full picture, who the customer is, their history, their risk profile and how every part of the business connects. That context is what makes autonomy actually work. And it compounds. Better claims data leads to more accurate pricing, better pricing helps us grow profitably and that growth gives us more data and even deeper context. And because it's one system that we built and we own, we can open it up directly to personal AI agents. That's extremely hard to do on top of decades of legacy infrastructure. So that's what makes the advantage durable.

Competitors can use the same AI models. They can automate individual tasks, but AI is only as good as the context it runs on. And a connected system built for autonomy over a decade isn't something you can buy or bolt on. We believe that advantage compounds over time. It lets us move faster, price more competitively and win a growing share of the market. And if that's a question that interests you, I strongly encourage you to tune into our Investor Day on November 17.

With that, I'll pass it over to the moderator, and we will take some questions from the Street.

Operator

[Operator Instructions] Your first question comes from the line of Jason Helfstein from Oppenheimer.

質疑応答

Jason Helfstein

Don't want to steal your thunder before the upcoming Analyst Day, but I appreciate the kind of color on how to think about expenses. I mean, look, I think there's a big question on we're at an inflection point with profitability for the business, kind of given your comment about slowing marketing, can you give us some hint of how we should think about maybe EBITDA pacing as we move into next year and how you're thinking about balancing kind of EBITDA relative to what are obviously some of the exciting growth drivers around car and other areas?

Timothy Bixby

Sure. I'll take that, Jason. I think a couple of ways to think about it. History is always a good guide for the future for Lemonade. So I think that trend will continue. There's a couple of things that typically drive the balance between growth and profitability and also over the course of quarters and how that flows. And so I think for a few years now, including this year, you'll see a pattern where there's a pretty consistent theme in the bottom line trajectory in the first 3 quarters of the year and then a really nice and notable step change in Q4, and that's a common theme. We expect to see it this year. It's likely to continue going forward.

And so when we come in February and give guidance for next year, it's pretty likely you'll see a similar pattern. And so when we indicate that we expect to be EBITDA positive in Q4, as we do, and EBITDA positive for the full year next year, that pattern will likely be consistent. And our growth spend will likely follow that. We've got a real benefit embedded in the business now where we can grow at a quite healthy rate with significantly slowing growth rate in growth spend. So we're spending more growth dollars for sure, but that growth rate is declining quite rapidly. And so we'll see absolute dollars in terms of gross spend increase next year. We are keeping a close eye on the balance of growth and profitability. It's been 4 years now when we've been talking about this Q4 EBITDA positive coming.

And with that kind of visibility, I would expect that theme to continue into next year. Our bias is always growth. When an extra $1 or $1 million or $5 million becomes apparent in the forward model, we tend to invest that in high ROI, high LTV to CAC growth. More often than not at the moment, that is car, and you saw that in the car growth rate year-on-year. You've seen that for a number of quarters. So I would expect all those themes to continue.

Operator

Your next question comes from the line of Daniel Lee from Morgan Stanley.

Daniel Lee

For guidance, you guys raised the full year revenue range by $16 million, but kept the full year adjusted EBITDA range unchanged. Could you talk about the drivers behind your $5 million to $9 million EBITDA guide for 4Q? Are you guys expecting maybe incrementally higher growth spend or other operating expenses in the fourth quarter?

Nicholas Stead

Thanks, Daniel. Happy to take that one. Yes, you're right. Revenue guidance is up and adjusted EBITDA guide for the fourth quarter and full year is stable. And the primary driver of that is related to our pet loss ratio. We're seeing a modest headwind, and you can see that in the sequential pacing of the pet loss ratio. And I'd note the pet loss ratio is largely under control. We're taking rate through the system to offset the dynamics that we're seeing, and that will flow through the financials in upcoming periods. And as a result, that loss ratio is expected to moderate over time. But that's the primary reason I'd note for that dynamic where you're seeing revenue up, but the adjusted EBITDA guide roughly stable.

Now I also wanted to say, notwithstanding that pet loss ratio factor, we continue to deliver a guidance of 33% IFP growth and positive adjusted EBITDA guidance. And so pet is 40% of our business, not 100% of our business, and that paints the picture of the resilience of our growth due to the benefits of diversification.

Daniel Lee

Got it. For my follow-up, I wanted to -- I know you'll probably -- you guys will probably provide more details on personal agents during Investor Day, but I'm curious, are you guys seeing any volume from personal agents like new today? And maybe could you talk a little bit -- I know it's early, but could you talk a little bit about the net impact from agentic for Lemonade's book of business over the next few years?

Daniel Schreiber

Daniel, yes, it is something -- it's the other Daniel here. It is something that we're going to discuss at our Investor Day, and Shai referenced it in his earlier answers as well. We're not seeing it yet in the volumes, but we are seeing it in significant ways. And we actually think this is something of a game changer for the industry and in a way that is very favorable to Lemonade.

I'll touch on a couple of things that I'll develop in our meeting in 10 days' time. But -- it starts with the fact that Lemonade has managed to automate so much. We've had our AI Maya since for 10 years now selling policies and AI Jim paying claims, and we've been working with a framework of a centralized unified system with orbit -- an orbit of agents around it really for a very, very long time. And the one human in the loop that we were never able to overcome is the consumer, of course. And now the consumer is getting their own stand-in, and suddenly the entire system becomes agentic. And for us, that's a very, very big deal. It means that we can move at paces that were not possible hitherto. And it also means that the kind of behaviors that we're seeing from personal agents -- they file much more rigorous and lengthy documents, and they can really produce something of a tsunami of well-reasoned legalistic kind of appeals.

It's the kind of stuff that we handle very comfortably because we've got our agents talking to your agents. But I think that's going to become an increasing -- is becoming an increasing issue for incumbents who are used to a more human-to-human contact. But honestly, beyond all of that tactical stuff, strategically, this is a big shift. The entire industry is predicated on the kind of brand advertising that depends deeply on a human at the other end who can come under the sway of a quirky, accented gecko or a quirky brunette called Flo or a guy called Doug who has an [ emu ] for pets. And all those kinds of things lose all of that impact the second you're talking to a personal agent. They've got nice muses, a nice fairy icon, but these are rational agents that are just oblivious to the very moat upon which the entire industry has built itself. So I think there are strategic shifts there of tremendous importance, and I'll develop that theme a bit more in the Investor Day.

Operator

Your next question comes from the line of Tommy McJoynt from KBW.

Thomas Mcjoynt-Griffith

A question on the renters business there. Now that you're in all 50 states, you talked about the possibility of potentially unlocking partnerships now that you are nationwide. What would be an example of that? Is that with property management companies? Would that be an embedded referral system where you would pay a commission or a referral fee to the partners for sourcing that business? What did you mean by that partnership comment?

Timothy Bixby

Yes. So I would think of that as more of the same, but even more so. And what I mean is there are a tier of folks who are potential great partners who have broad reach, are a really nice fit for an effective renters product that just have a nationwide requirement. And so there's a bit of a ceiling that we've dealt with for a very long time. We've had a great number of excellent partners all along the way. Our bias, of course, is direct-to-consumer, but we've always had a nice -- really nice stable of effective partners in probably 4 or 5 different verticals and property management is certainly near the top of the list.

But this kind of opens up a broader world of more established players with perhaps a more rigorous requirement that would be nationwide. So I would think of it as not so much a light switch shift, but a consistent improvement and expansion over time and our ability to reach into these great partners. So we're -- the head of our renters team and the company is really focused on that. So you'll see that in the coming quarters.

Thomas Mcjoynt-Griffith

Okay. Got it. And then you had some interesting comments on your cross-sell growth trends that you're seeing. What portion of your incremental cross-sales are because you now have a new product live in a state like, for instance, expanding car into more states? Is that driving the majority of cross-sales? Or are there still cross-sales happening where people are coming around to getting a pet policy where they've already had a renters policy, but it's already been available in that state for a number of years?

Nicholas Stead

Tommy, I think I'd note it's really coming from both places. And cross-sales in particular, are performing very well. The growth rate of cross-sales currently is roughly double that of total in-force premium. And we're -- we expect that to continue to be an increasingly significant driver of growth over time. And I'd really call out both of those dynamics. We're continuing to expand penetration within our existing cohorts. But then certainly, when we launch a new state, we do see a spike in cross-sales as a result of that.

Thomas Mcjoynt-Griffith

And just actually last quick one. What's the percentage of your IFP or number of customers that have more than one product? And I guess, should I think of all of those as part of your cross-sale definition?

Nicholas Stead

The percentage of total in-force premium that is bundled at the end of the quarter is fast approaching 20% and has been improving steadily over time. The percentage of customers who have more than one policy is also interesting. But for us, there's a dynamic where we have over 2 million renters customers and for a meaningful portion of those customers, a bundle isn't an immediate need. And so I instead point to those dollars, which I think are a more helpful measure. You've got, like I said, approaching 20% of total in-force premium. And when you look at the dollars contributed by cross-sales really growing rapidly.

Operator

Your next question comes from the line of Andrew Andersen from Jefferies.

Andrew Andersen

When you describe the newer car cohorts as healthier, which metrics are improving? And how do their loss ratios and retention compare with prior cohorts at a similar maturity?

Nicholas Stead

So when I look at the overall car underwriting performance, let me break that down a bit perhaps. The calendar quarter loss ratio was around 63%, and we did see a meaningful benefit from prior period development within our car line of business. And so outside of that effect, the car loss ratio is trending in the low to mid-70s range. New business continues to have a slightly higher loss ratio than renewal business. But within the overall performance, I'd characterize both frequency and severity for both new and renewal business generally to be trending healthily and in line with our expectations. And that's a notable fact given the sheer pace of growth rate acceleration that we're seeing from an IFP perspective in car.

Andrew Andersen

And maybe just on expenses, even after adjusting for some items like stock comp and one-timers and interest expense -- GC interest expense, it does still look like underlying G&A is increasing at a teens or high teens rate despite the lower headcount. So could you maybe just break down what is driving that underlying increase a bit more and how we should think about the underlying run rate increase into '27?

Nicholas Stead

Within G&A, the primary drivers of expense growth from a year-over-year perspective are interest expense, stock-based compensation expense and a couple of one-timers in the prior year quarter. You're right that it's not perfectly flat outside of those dynamics. But if I point to the sequential change, the growth is notably lower. If I look ahead, I might point to Q2 '27 as an interesting point in time where we lap the impact of the executive awards from earlier in the year. And so the stock-based compensation driver is no longer contributing to year-over-year growth. And from that point onwards, I would expect to see significantly moderating year-over-year growth in G&A.

Operator

Your next question comes from the line of Alejandro Zumbato from BMO.

Michael Zaremski

Mike Zaremski filling in for Alejandro. Just back quickly to the conversation on the pet insurance loss ratio. Maybe you could just kind of give a little bit more color on what's driving that a bit higher and what actions you're going to take? And then maybe you could also just touch on the European gross loss ratio as well and what's -- any color there?

Nicholas Stead

Yes. Thanks, Mike. I can take those. So within our pet line of business, we're impacted by an inflationary macro dynamic that's impacting the entire industry with increasing vet costs, and we're actively taking rate through the system to address that. And so like I think we mentioned earlier, we do expect that pet loss ratio trend to moderate and normalize in the upcoming several quarters. I'll note it takes a few quarters for that to flow through the financials. And maybe hitting Europe for a moment, the loss ratio was elevated in the current quarter. That type of volatility is not entirely unexpected with a book of our size and scale. And I'll note, 29 points within the current quarter results were driven by catastrophes and large losses.

Now with that said, in Europe as well, we are pursuing some targeted rate actions to drive improved underwriting margins on an attritional basis. Now maybe I wanted to -- while we're on the topic of loss ratio -- those are excellent questions, and I -- hopefully, I answered your question on the drivers. On a trailing 12-month basis, our loss ratio is 60% overall. And we view that as a very healthy level relative to our own history and relative to benchmarks. And from here, there are certain drivers across the business, for example, mix shift to car and certain segments where we may lean into competitive pricing, and those drivers may modestly increase the loss ratio over time. We're not solving for loss ratio in isolation, however. We're solving for total gross profit dollar generation. And so I encourage you to continue to focus primarily on gross profit and its growth rate as we continue to grow.

Timothy Bixby

And perhaps importantly, on loss ratio, these are not surprises to us. While it feels -- can often feel better when the number goes down and feel a little worse when the number goes up, that's really not how we view it. We have a view into loss ratio as it develops almost on a real-time basis. We're looking at each month at minimum as we go. And so while reporting a full quarter is interesting because that's the checkpoint, these are not big surprises to us. They've been factored into our guidance. They factor into our forward models.

And in some ways, these modest volatilities in loss ratio and other key KPIs up and down is really the positive factor that indicates that we're growing effectively. We're shifting mix. We're expanding newer products. We're growing car. Europe has gone from a rounding error to a really large and dynamic business. And so these are the kinds of things that you see in the metrics as you go. But if you back up and look at a couple of quarters or a year, these are right on track with our expectations.

Michael Zaremski

Understood. Good color. And just as a quick follow-up on the exciting news about kind of increasing cross-sell. If we were to kind of seek to model that into our models, I think you gave some color earlier, but there's -- is it correct there's not really much incremental customer acquisition cost spend on whatever product is being cross-sold?

Nicholas Stead

Yes, that is a correct assumption. And if you're looking ahead, we remain bullish on our ability to continue to drive cross-sales growth that is notably higher than the overall growth of the top line.

Operator

At this time, there are no further questions. This concludes today's call. Thank you for attending. You may now disconnect.