Digital Insurer Lemonade Looks to Captives in Its Reinsurance Program

InsurTech Lemonade, Inc., has formed two captive insurance entities as part of its July 1 reinsurance renewal program.

In a statement, Lemonade said it has formed a new risk-bearing entity, Lemonade Re, in the Cayman Islands. Lemonade said it plans to use the new Lemonade Re entity to hold some of its retained risk.

Lemonade said it also has established a captive cell at a Bermuda transformer vehicle and plans to use the cell 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 Lemonade statement said.

Lemonade said its reinsurance renewal was led by the same reinsurers as the expiring program and was oversubscribed. The program covers all of Lemonade's businesses globally.

Lemonade relies on artificial intelligence to offer renters, homeowners, car, pet, and life insurance.