"Lemonade" is the name for products and services provided by a group of commonly-owned companies that provide, distribute and service insurance.
For our US entities, please visit our US website.
As used on this site (www.lemonade.com/de/en), the name "Lemonade" also refers collectively to the following legal entities in the group:
Lemonade, Inc., a public benefit corporation organized under Delaware law, is the parent company in the group and it provides certain personnel, facilities and services to each subsidiary company in the group. It owns 100% of the following subsidiary companies in support of its European operations:
The Giveback is a way for Lemonade Insurance N.V. to contribute money to causes its policyholders care about. The Giveback is paid only if payment is authorized by Lemonade Insurance N.V.’s Board consistent with their duty of care and all regulatory and capital requirements. The amount of the Giveback is based on each peer group’s total premiums and losses, after deduction of certain expenses described below.
After you purchase Lemonade insurance, we ask you to tell us which cause you would like us to support with the portion of any Giveback resulting from your policy. Policyholders who select the same cause compose one recognized peer group on the books of Lemonade Insurance N.V.. We will not recognize peer groups defined by causes promoting hate, violence, discrimination or similar things, and we will only donate to causes organised and officially registered a charitable organisation, provided that no part of the Giveback will inure directly to the benefit of any private individual.
We record the total premiums paid by the members of each peer group, deduct a flat fee to pay for the expenses of running the insurance business, use some premiums to purchase reinsurance (and some unavoidable expenses), and use the remainder to pay claims. Every twelve months at the end of June, the total claims paid to the members of each peer group are set against the total premiums remaining to the credit of that peer group after the deductions just mentioned. Provided that the company as a whole is adhering to regulatory and capital requirements, remaining funds will be donated to the cause by which that peer group is defined.
As mentioned above, a big part of what we do with your premiums is to buy reinsurance. So what is reinsurance? It’s the way insurance companies hedge the risks their policyholders pay them to assume. Think of it as insurance for insurance companies. Our reinsurance program protects Lemonade Insurance Company against large individual losses and accumulations of losses (such as would result from a hurricane). Suppose we pay a claim under your policy, and that payment is reinsured. Then the reinsurance company would reimburse Lemonade Insurance N.V. for all or part of that payment.
Although we would dearly love to guarantee the Giveback, sometimes it would not be in the best interests of our policyholders to do so. When our policyholders pay us premiums today, they are buying a promise from Lemonade Insurance N.V. to indemnify them in the event they suffer covered losses in the future. While you are paying a fixed price today for your policy, the future cost to Lemonade Insurance N.V. of its promise to you can only be estimated. Since paying your claims is job #1, the possibility that prices will prove inadequate to cover loss costs requires that insurance companies adhere to strict standards intended to ensure their future ability to pay claims. Furthermore, like all corporate directors, insurance company directors owe a legal duty of care to run the company in a financially prudent manner. As a result, Lemonade Insurance N.V. board of directors has the discretion to pay all of the Giveback, some of it, or none of it.
In other words: the Giveback is not a share of the profits of Lemonade as a whole; the Giveback is not a contractual obligation of Lemonade to you or to any cause; the Giveback is not something for which you may claim a tax deduction.
Yet it is our stated intention to donate Giveback, and our models suggest we will be able to do so most of the time.