Pay-per-mile personal auto insurer Metromile announced a partnership with global reinsurance broker JLT Re for a risk transfer and unique reinsurance agreement. Hudson Bermuda led this reinsurance agreement which also includes MAPFRE RE.
Metromile said the agreement gives it additional leverage for future growth.
Metromile claims that while the industry is grappling with an increase in frequency of claims, its pay-per-mile model creates a hedge against this trend. That makes the company attractive to reinsurers because of the lower volatility in the loss ratio, according to an Preston, CEO, Metromile.
“This reinsurance agreement provides continued validation that the pay-per-mile model is efficient and highly scalable,” said Preston. “It also emphasizes our innovative customer experience and strong retention which is driven by our customers’ desire for technology-first solutions.
Metromile uses machine learning for claims modeling, which lowers risk and further enhances the model’s appeal to reinsurers, according to Preston. Last month Metromile paid its first completely automated claim.
Metromile’s pay-per-mile insurance is currently available in seven states, including California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia. and Washington.
JLT Re’s Insurtech and Transportation teams led by Gregg Holtmeier and David Johnson, worked with Hudson Structured Capital Management and MAPFRE RE to develop the bespoke agreement. JLT Re is part of the Jardine Lloyd Thompson Group plc.
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