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XL Catlin takes sip of Lemonade

XL Innovate, the venture capital fund backed by XL Catlin, has invested an undisclosed amount in peer-to-peer insurer Lemonade.

The fund’s Managing Partner Tom Hutton will join the board of Lemonade, which is preparing for its launch in New York.

“We track the insurance space very closely, and have analysed virtually every insurtech initiative in recent years,” Mr Hutton said.

“Lemonade is a standout by any measure. Its team and technology is matched only by its ambition, and I have every confidence it will continue to lead the insurtech field.”

XL Innovate did not respond to queries from insuranceNEWS.com.au about the size of its investment.

Lemonade told insuranceNEWS.com.au the amount remains confidential.

Lemonade has raised $US13 million ($17 million) in initial funding and has signed arrangements with reinsurance partners including Berkshire Hathaway’s National Indemnity, XL Catlin and two Lloyd’s syndicates.

“We will be launching and rolling out in the US first, but our plan is to reach all consumers interested in having an insurance experience that is instantaneous, unconflicted and downright delightful,” a spokesman told insuranceNEWS.com.au.

Peer-to-peer insurers are part of the insurtech wave pushing for a share of the global insurance market – worth at least $US1 trillion ($1.31 trillion) – by promising more affordable and transparent cover.

Consumers typically receive cash-back bonuses if they make no claims within a year.

They are grouped together according to their insurance needs and part of their premium is combined to make up the cash-back pool.

Germany’s Friendsurance is widely considered the first peer-to-peer insurer, established in 2010.