Lemonade, a new insurance start-up that intends to offer peer-to-peer insurance in the US, received a recent boost when it announced that several well-known insurers, including Lloyd’s of London underwriters and Berkshire Hathaway’s National Indemnity Company, have signed up to provide reinsurance backing to the new venture.
Two tech entrepreneurs, Daniel Schreiber and Shai Wininger, started Lemonade. They formed the company to offer peer-to-peer insurance products, which Lemonade plans to make available later this year. While details of the company’s intended offerings are currently scarce, similar European companies have provided users with the ability to form small groups of policyholders. Those policyholders pay a premium, which is maintained in a pool that pays claims. Any money left in the pool at the end of the policy period is returned to the policyholders.
After obtaining $13 million in venture capital funding and hiring four seasoned insurance executives from ACE and AIG, Lemonade most recently announced its partnerships with several leading reinsurers. According to Lemonade, Everest, Hiscox, Munich, Transatlantic and XL Catlin are joining Lloyd’s syndicates and National Indemnity to provide reinsurance backing for the peer-to-peer insurance that Lemonade will offer. Mr. Schreiber hailed these partnerships as providing further peace of mind to Lemonade’s future policyholders that their insurer will be able and willing to pay claims.