Lemonade renews reinsurance using Bermuda cell

Digital insurer Lemonade has renewed its reinsurance programme, in part through a Bermuda-based captive cell used to reinsurance its windstorm exposure. 

Lemonade said the global reinsurance programme was led by tier-one carriers and the the expiring treaty and was oversubscribed on all dimensions.

The company said 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. 

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

"Similarly, a captive cell was established at a Bermuda transformer, which has been utilised to retain most of Lemonade’s windstorm exposure," management said. "While windstorm reinsurance capacity was available, this structure was determined to offer a materially better cost/benefit profile."

“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 programme renews this year on yet better terms than last year, and was once again oversubscribed. This programme allows us to continue to accelerate our growth in a very capital light mode.”

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