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Lemonade Announces Successful Renewal of Reinsurance Program

The program, led by Lemonade’s existing partners, will commence July 1, 2023. Lemonade’s financial expectations for Q2 and full year 2023 remain unchanged.

Lemonade (NYSE: LMND), the digital insurance company powered by AI and social impact, announced that its reinsurance program has been renewed in good time and on good terms. The Lemonade program is led by the same tier-one carriers as the expiring and was oversubscribed on all dimensions.

The centerpiece of the program is 55% quota share protection, the same level as the expiring coverage. The variable ceding commissions are projected to be roughly equivalent to those enjoyed under the outgoing agreements. The program covers all Lemonade businesses globally, now also including Metromile, acquired by Lemonade in 2022.

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

The renewed program is augmented by some new structures as well. For one, Lemonade has formed a new risk-bearing entity, Lemonade Re, in the Cayman Islands. Lemonade plans to hold some of its retained risk in Lemonade Re. Similarly, Lemonade has established a captive cell at a Bermuda transformer, and plans to utilize it to retain most of its windstorm exposure. While windstorm reinsurance capacity was available, this structure was determined to offer a materially better cost/benefit profile.

The extant program expires at midnight on June 30, 2023, at which time the new program will go into effect for a standard 12-month term. The Company’s financial expectations for Q2 and for the full year 2023, as communicated in the Q1 ‘23 Lemonade Letter to Shareholders, remain unchanged.

About Lemonade

Lemonade 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 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.

Follow @lemonade_inc on Twitter for updates.


This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding our financial outlook for the second quarter of 2023 and full year 2023 and the projected variable ceding commissions under the renewed reinsurance program. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: our history of losses and the fact that we may not achieve or maintain profitability in the future; our ability to retain and expand our customer base; the fact that the “Lemonade” brand may not become as widely known as incumbents’ brands or the brand may become tarnished; the denial of claims or our failure to accurately and timely pay claims; our ability to attain greater value from each user; the novelty of our business model and its unpredictable efficacy and susceptibility to unintended consequences; the possibility that we could be forced to modify or eliminate our Giveback, which could undermine our business model; the examinations and other targeted investigations by our primary and other state insurance regulators that could result in adverse examination findings and necessitate remedial actions; our limited operating history; our ability to manage our growth effectively; the impact of intense competition in the segments of the insurance industry in which we operate on our ability to attain or increase profitability; the unavailability of reinsurance at current levels and prices, which could limit our ability to write new business; our ability to renew reinsurance contracts on comparable duration and terms to those currently in effect; our exposure to counterparty risks as a result of reinsurance; the loss of personal customer information, damage to our reputation and brand, or harm to our business and operating results as a result of security incidents or real or perceived errors, failures or bugs in our systems, website or app; our actual or perceived failure to protect customer information and other data, respect customers’ privacy, or comply with data privacy and security laws and regulations; our ability to comply with extensive insurance industry regulations and the need to incur additional costs or devote additional resources to comply with changes to existing regulations; our exposure to additional regulatory requirements specific to other vertical markets that we enter or have entered, including auto, pet and life insurance, and the need to devote additional resources to comply with these regulations; the ability of Lemonade to successfully complete the integration of Metromile’s operations, product lines and technology; the ability of Lemonade to continue to implement its plans, forecasts and other expectations with respect to Metromile’s business and realize additional opportunities for growth and innovation; the ability of Lemonade to realize the anticipated synergies from the transaction in the anticipated amounts or within the anticipated timeframes or costs expectations or at all; the ability to maintain relationships with Lemonade’s and Metromile’s respective employees, customers, other business partners and governmental authorities; and the other risks, uncertainties and important factors contained and identified; and our inability to predict the lasting impacts of COVID-19 to our business in particular, and the global economy generally. These and other important factors are discussed under the caption “Risk Factors” in our Form 10-K filed with the SEC on March 3, 2023 and in our other and subsequent filings with the SEC, which could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s beliefs as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.


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