* Rental insurtech Jetty announced Wednesday that the company is now exclusively partnering with Farmers Insurance as its reinsurer.
* Jetty's previous reinsurer, Munich RE, paused the company's ability to write new policies for two weeks amidst the worst of the coronavirus shutdowns.
* On May 7, New York Governor Andrew Cuomo passed an executive order that allows security deposits to be used for rent, providing a potential boon to companies like Jetty that sell security deposit insurance alternatives.
* Visit Business Insider's homepage for more stories.
Jetty, an insurance technology startup that provides a range of products for renters, is now exclusively using Farmers Insurance's digital rental insurance brand, Toggle, as its reinsurance partner for all new policies.
This comes after Business Insider reported that Jetty and Munich Re, Jetty's previous reinsurer and the second-largest reinsurer in the world, paused all new policies in early April as the coronavirus created underwriting challenges. New policies were paused for two weeks, according to Jetty CEO Michael Rudoy.
Farmers Insurance Group is a subsidiary of a global insurance conglomerate Zurich Insurance Group. The partnership with Jetty is through Toggle, a Farmers company launched in 2018 that offers affordable renters coverage aimed at millennial customers.
"Farmers felt like the most strategically aligned carrier that we could possibly partner with," Rudoy told Business Insider. "As evidence, they started Toggle, an insurance brand focused on renters, and have invested in other renter-focused companies. They have a big thesis on renting and serving renters."
Jetty offers products including lease guarantees, pet insurance, and renters insurance, which could potentially leave it on the hook to repay lost rent as unemployment and rent non-payment surges. It also replaces traditional security deposits with an insurance product, for which renters pay a non-refundable premium.
The company laid off 35 of its then roughly 90 person staff in April of this year.
The last few months have been busy in the buzzy insurtech world.
Business Insider reported last month that Rhino, which also offers security deposit insurance, failed to disclose family ties that its CEO had with the CEO of a client to its reinsurer, Knight Re. Rhino's CEO, Paraag Sarva, is the younger brother of Knotel's CEO, Amol Sarva. In recent months, Knotel has let millions of dollars in bills to vendors and landlords go unpaid and has signaled it will walk away from leases, which could leave Knight Re on the hook for substantial payouts on two specific leases.
Lemonade, a SoftBank-backed insurtech, filed financial paperwork earlier this month to go public. The company, which sells a wide range of insurance products including rental insurance, revealed that it had lost $108.5 million in 2019, double its 2018 losses, even though revenue increased threefold.
States and cities across the country have been passing renters choice laws, which mandate that landlords offer renters security deposit alternatives and laws that allow renters to use their security deposits to pay rent. In May, Governor Andrew Cuomo passed a law allowing renters to pay their rent with their security deposit, which could then be replaced with a security deposit insurance product. These laws are potentially huge boons to companies like Jetty.
Jetty has raised $40.5 million in three funding rounds. Most recently, it raised $25 million in a February 2019 Series B round. The round was led by Silicon-Valley legends Khosla Ventures and included funding from Peter Thiel's Valar Ventures and fintech investor Ribbit Capital.
SEE ALSO: Peter Thiel-backed insurance startup Jetty lays off 40% of staff days after pausing the sale of all new policies
SEE ALSO: Knotel and insurance startup Rhino didn't disclose its CEOs were brothers when it struck a complex financial deal. Now a key partner could be on the hook as Knotel scrambles to pay bills, slashes staff, and plans to shed portions of its portfolio.
SEE ALSO: Masa Son is facing one of his biggest challenges yet as the SoftBank Vision Fund racks up billions in losses. 12 insiders reveal where it all went wrong.
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