Peer-to-peer insurance startup Lemonade said it has signed on several global reinsurers, including Lloyd’s of London, XL Catlin and Berkshire Hathaway’s National Indemnity.
Everest Re, Hiscox and Munich Re have also come on board as Lemonade’s reinsurance partners.
Reinsurance backing enables Lemonade to proceed with its consumer launch “in the coming months,” according to the startup’s Jan. 9 announcement, though the company doesn’t yet specify a particular launch date. Lemonade has said that it will launch in the first half of 2016.
Daniel Schreiber, Lemonade’s CEO and co-founder, said that the reinsurance partners will give customers peace of mind as far as the fledgling carrier being both “willing and able to pay your claims.”
He asserted in prepared remarks that Lemonade “is the only insurer that doesn’t make money by denying claims – so no one is more willing than us. With the backing of the world’s foremost reinsurance names, no one is more able either.”
In January, Lemonade announced that it had turned to four veteran insurance executives from AIG and ACE to round out its executive team. Leading the pack: new Lemonade Chief Insurance Officer Ty Sagalow, a 25-year senior executive with American International Group.
Lemonade debuted in December with news that it attracted $13 million in seed funding from Sequoia Capital, a California venture firm that typically backs technology or industry game-changers. Aleph, a venture capital firm that partners with Israeli entrepreneurs, also took part.
Lemonade bills itself as the game-changing high-tech P2P insurance carrier, with a “sharing economy” approach that it asserts will upend the insurance industry business model and make the process of buying insurance “delightful” for consumers.
Other companies have pursued P2P insurance, including Germany’s friendsurance, the U.K.’s Guevara, and China’s TongJuBao. Typically, a P2P site invites users to form small groups of policyholders who pay premiums into a pool to pay claims. Members get any leftover pool money at the end of the policy period.