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Why does LR even matter? They cede 75% of their risk so they operate more like a broker. I reckon the reason they don't cede more risk is because the re-insurer
by aquigley 6y ago
Why does LR even matter? They cede 75% of their risk so they operate more like a broker. I reckon the reason they don't cede more risk is because the re-insurers want them to have skin in the game. The re-insurers could get adversely selected if Lemonade can't price well
- aquaphile 6y agoLR always matters, whether or not one cedes a portion of the risk. An insurance program has little value unless it is profitable over time. While some large P&C insurers historically ran their book of business at break-even, and made it up on investment income (reflected in their combined ratio), that is not a viable option given current interest rates.