This latest move comes alongside the company’s announcement of the successful renewal of its reinsurance program, which was secured on favourable terms and well ahead of schedule.
The Lemonade reinsurance programme, which is led by top-tier carriers, has garnered overwhelming interest and support, with oversubscription recorded across all dimensions. The program remains consistent with its predecessor, maintaining continuity and stability for Lemonade.
To enhance its risk management strategy, Lemonade has chosen to utilise the Bermuda captive cell to retain a majority of its wind storm exposure. Although wind storm reinsurance capacity was available, Lemonade’s thorough analysis led to the determination that the captive cell structure would provide a significantly improved cost/benefit profile.
Furthermore, Lemonade has introduced a new risk-bearing entity, Lemonade Re, based in the Cayman Islands. Lemonade intends to allocate a portion of its retained risk to Lemonade Re, enhancing its risk management capabilities.
Comprehensive reinsurance programme covers all Lemonade businesses worldwide
The centrepiece of the renewed programme is a 55% quota share protection, maintaining the same level of coverage as the previous agreement. The variable ceding commissions are projected to be on par with the outgoing agreements, ensuring a seamless transition.
According to reports, the comprehensive reinsurance programme covers all Lemonade businesses worldwide, including the recently acquired Metromile, effectively strengthening Lemonade’s position in the insurance market.
Daniel Schreiber, Co-CEO, and Co-founder of Lemonade expressed his confidence in the renewed program, stating, “It says a great deal when some of the world’s largest and most respected reinsurers choose to stake their capital on the performance of our business. These partnerships enable us to operate in a capital-light manner, allowing us to focus our resources on expanding our customer base across all products and geographies while leveraging our technologies to enhance efficiency and improve risk assessment.”
The current reinsurance programme is set to expire on June 30, at which point the new program will come into effect for a standard 12-month term, providing Lemonade with continued stability and support.
Lemonade, known for its innovative use of artificial intelligence and commitment to social impact, offers a range of insurance products, including renter, homeowner, car, pet, and life insurance. By leveraging cutting-edge technology and streamlining traditional processes, Lemonade aims to eliminate paperwork and provide instant and hassle-free insurance experiences for its customers.
