Lemonade, Inc. Fair Value Disclosure
| December 31, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||
| Corporate debt securities | $ | — | $ | 501.2 | $ | — | $ | 501.2 | |||||||||||||||
| U.S. Government obligations | — | 140.1 | — | 140.1 | |||||||||||||||||||
| Asset-backed securities | — | 45.5 | — | 45.5 | |||||||||||||||||||
| Non U.S. government obligations | — | 22.0 | — | 22.0 | |||||||||||||||||||
| Fixed maturities | — | 708.8 | — | 708.8 | |||||||||||||||||||
| Short term investments | — | 14.1 | — | 14.1 | |||||||||||||||||||
| Total | $ | — | $ | 722.9 | $ | — | $ | 722.9 | |||||||||||||||
| Financial Liabilities: | |||||||||||||||||||||||
Warrant liability (1) | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||
| Corporate debt securities | $ | — | $ | 470.8 | $ | — | 470.8 | ||||||||||||||||
| U.S. Government obligations | — | 107.7 | — | 107.7 | |||||||||||||||||||
| Asset-backed securities | — | 22.9 | — | 22.9 | |||||||||||||||||||
| Non U.S. government obligations | — | 6.0 | — | 6.0 | |||||||||||||||||||
| Fixed maturities | — | 607.4 | — | 607.4 | |||||||||||||||||||
| Short term investments | — | 27.5 | — | 27.5 | |||||||||||||||||||
| Total | $ | — | $ | 634.9 | $ | — | $ | 634.9 | |||||||||||||||
| Financial Liabilities: | |||||||||||||||||||||||
Warrant liability (1) | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Mar 3, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 8, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.