Lemonade, Inc. announced the successful renewal of its reinsurance program, effective July 1, 2025. A key change in the renewed program is the significant reduction of its ceded quota share reinsurance from approximately 55% to approximately 20%.
This strategic decision was driven by the company's strong progress in diversification, improved underwriting prowess, and a favorable loss ratio trajectory. Lemonade's President and cofounder, Shai Wininger, stated that this reduction reflects the strength and precision of their tech-based underwriting and pricing machines.
The company expects this shift to improve margins and allow it to retain a larger portion of its premiums, while still maintaining a capital-light structure. The variable ceding commission rate related to the quota share agreements is anticipated to be roughly equivalent to the expiring agreements, and the program covers all Lemonade businesses globally for a standard 12-month term.
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