Insurtech: Digital Insurance Firm Lemonade Announces Renewal of Reinsurance Program

Lemonade (NYSE: LMND), the digital insurance company powered by AI and social impact, announced that its reinsurance program is being renewed.

It was reportedly led by the same tier-one carriers “as the expiring treaty and was oversubscribed on all dimensions.”

The core of the program “is 55% quota share protection, the same level as in recent years.”

The variable ceding commissions are projected “to be roughly equivalent or better to those enjoyed under the outgoing agreements.”

The program covers all Lemonade businesses globally.

Daniel Schreiber, Lemonade CEO and cofounder said:

“Partnering once again with the world’s largest and most respected reinsurers who have chosen to stake their capital on the performance of our business is a big deal for Lemonade. Our program renews this year on yet better terms than last year, and was once again oversubscribed. This program allows us to continue to accelerate our growth in a very capital light mode.”

A year ago, Lemonade formed “a new risk-bearing entity, Lemonade Re, in the Cayman Islands, where some of the retained risk was held.”

Similarly, a captive cell was established “at a Bermuda transformer, which has been utilized to retain most of Lemonade’s windstorm exposure.”

While windstorm reinsurance capacity was available, this structure “was determined to offer a materially better cost/benefit profile.”

The new program is in effect for “a standard 12-month term.”

The company’s financial expectations “for Q2 and for the full year 2024, as communicated in the Q1 ‘24 Lemonade Letter to Shareholders, remain unchanged.”

As covered, Lemonade explains that it “offers renters, homeowners, car, pet, and life insurance.”

Powered by artificial intelligence and social impact, Lemonade’s full stack insurance carriers in the US and the EU “replace brokers and bureaucracy with bots and machine learning, aiming for zero paperwork and instant everything.”

A Certified B-Corp, Lemonade says that it gives unused premiums “to nonprofits selected by its community, during its annual Giveback. Lemonade is currently available in the United States, Germany, the Netherlands, France, and the UK, and continues to expand globally.”

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