Insurance companies are struggling with mounting losses from more frequent and severe extreme weather events as global warming accelerates. Demex partners with reinsurance companies and brokers to provide coverage when losses exceed predetermined thresholds.
The Washington, DC-based company uses weather and claims data to quantify risks and determine the needs of coverage insurers and reinsurers. “Each Demex insurer customer gets a reinsurance product that is precisely calibrated to how those weather events affect its business, which is tuned based on its own data,” said Hank Hattemer of Blue Bear Capital, which backed Demex alongside Congruent Ventures, Moxxie Ventures and MetaProp.
The nearly $10.3 million injection of capital comes from a Series A and recently simple agreement for future equity, or SAFE, rounds.
Insurtech
Parametric insurance triggers automatic payments to policyholders upon a predetermined event, without the need to calculate actual losses after the fact. It’s gaining traction as a way to mitigate weather and climate-related risk (for background, see, “Uptick in climate-smart insurance for vulnerable farmers”). Payouts are much faster compared to traditional insurance claims.
Madison, Wisc.-based Understory raised $15 million in June to expand parametric weather insurance coverage for renewable energy developers. Arbol, based in New York, raised $60 million in April to provide parametric insurance coverage against natural disasters in more than 15 countries.
