Lemonade Announces Successful Renewal of Reinsurance Program

Lemonade, the digital insurance company powered by AI and social impact, announced that its reinsurance program is being renewed. It was 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.

“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,” said Daniel Schreiber, Lemonade CEO and cofounder. “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.