Risk Factors Update Summary

• Improved risk-based capital ratios: LIC from 376% to 416%, MIC from 440% to 476%.
• Revenue grew from $128.4 million in 2021 to $256.7 million in 2022, with total employees increasing from 1,119 to 1,367.
• Risk of economic slowdown due to future disease outbreaks, potentially causing a global recession.
• Accumulated federal NOLs increased from $236 million to $269 million, with state and local losses rising from $25 million to $29 million.
• Increase in risk due to reliance on multiple payment processing vendors instead of one.
• Entered into a Customer Investment Agreement for up to $150 million from June 2023 to December 2024, and up to $140 million from December 2024 to December 2025.
• Received a third country branch authorization in the UK in 2023 to operate on a permanent basis.
• NYDFS amended Cybersecurity Requirements for Financial Services Companies on November 1, 2023, expanding requirements and adding new obligations.
• The EU AI Act is expected to enter into force in 2024, impacting the use of artificial intelligence in the EU market.
• The EU AI Act proposes fines for breach of up to 7% of worldwide annual turnover, affecting companies like Lemonade.