AI-powered digital insurance company Lemonade has announced the renewal of its reinsurance program.
According to Lemonade, the renewal was led by the same tier-one carriers as the expiring treaty and was oversubscribed on all dimensions.
The program's core remains 55% quota share protection, consistent with recent years. The variable ceding commissions are expected to be roughly equivalent or better than those under the previous agreements. This program covers all of Lemonade's global businesses.
A year ago, Lemonade established a new risk-bearing entity, Lemonade Re, in the Cayman Islands, where some of the retained risk was held. Additionally, a captive cell was set up at a Bermuda transformer to retain most of Lemonade’s windstorm exposure.
While windstorm reinsurance capacity was available, this structure was determined to offer a better cost/benefit profile.
The new program is in effect for a standard 12-month term. The company noted that its financial expectations for Q2 and for the full year 2024, as communicated in the Q1 2024 Lemonade Letter to Shareholders, remain unchanged.
Daniel Schreiber (pictured above), Lemonade CEO and co-founder, highlighted the reinsurance program and what it means for the company and its clients.
“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,” he said.
In April, Lemonade, which is headquartered in New York and has a European base in Amsterdam, expanded further in Europe with a new offering in France.
With BNP Paribas Cardif acting as co-insurer, the company will begin to provide homeowners’ insurance across France.
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