Lemonade claims strong 1/7 renewal, adds captives to playbook

Artificial intelligence-powered insurtech  Lemonade has renewed its reinsurance programme ahead of its 1/67 deadline, securing what it described as “good terms” with top-tier carriers, then crafted new risk-bearing captive entities as it moves to retain more risk itself.

Lemonade said it had secured the same carriers that led the previous programme and found its offer “oversubscribed on all dimensions.” The quota share protection remained flat from the prior year at 55%.

The variable ceding commissions are projected to be roughly equivalent to those under the outgoing agreements. The programme covers all Lemonade businesses globally, now also including Metromile, which it acquired in 2022.

Lemonade is also augmenting its programme with some new structures as well. Lemonade has formed a new risk-bearing entity, Lemonade Re, in the Cayman Islands. It plans to hold some of its retained risk in Lemonade Re. Additionally, Lemonade has established a captive cell at a Bermuda transformer, and plans to utilise it to retain most of its windstorm exposure.

Daniel Schreiber (pictured), Lemonade co-CEO and co-founder, said: “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 partners allow us to operate in a very capital light mode, and focus our resources on expanding our customer base across all of our products and geographies, while harnessing our technologies to get ever more efficient, and ever better at matching rate to risk.”

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