Lemonade, the technology driven insurance carrier, has established a captive cell in Bermuda, which it plans to utilise in order to retain most of its windstorm exposure.
The cell was formed as part of the company’s reinsurance renewal programme, which Lemonade said was “in good time and on good terms.”
Although windstorm reinsurance capacity was available, Lemonade said the cell structure was determined to offer a materially better cost and benefit profile.
The company has also formed Lemonade Re in the Cayman Islands, where it plans to hold some of its retained risk.
Lemonade is a B Corp that offers renters, homeowners, car, pet, and life insurance and is powered by artificial intelligence and social impact.
The centrepiece of the reinsurance programme is 55% quota share protection, the same level as the expiring coverage, and covers all Lemonade businesses globally.
“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 existing reinsurance programme expires at midnight on 30 June 2023, at which time the new programme will go into effect for a standard 12-month term.