Munich Re-backed insurtech secures investment for climate solution
A Munich Re-backed insurtech has secured funding from a syndicate of existing and new investors for a solution it has developed to address accumulating losses caused by secondary perils.
The Demex Group was seeking investment for its Retained Climate Risk Reinsurance (RCR Re) solution. It has now raised $5 million from a syndicate of existing and new investors, led by Blue Bear Capital. Blue Bear Capital, a venture and growth equity firm focused the world's climate challenges, has been a partner for Demex since 2021.
Bill Clark, Demex CEO, said: “This additional investment empowers us to deliver new weather risk transfer capabilities to insurance companies that are facing escalating losses due to the increased frequency of non-catastrophic weather events.
“Severe convective storms (SCS) cause accumulated losses in midwestern states that exceed hurricane losses in coastal states. SCS loss accumulation increasingly causes earnings unpredictability, credit rating downgrades, and even insolvency for insurance companies. Our reinsurance broker distribution partners and our risk capacity network are eager to address this risk and Demex RCR Re is the first purpose-built solution designed specifically for severe thunderstorms.”
Hank Hattemer, COO of Blue Bear Capital, commented: “Blue Bear is excited to lead this round for Demex given the unequivocal opportunity for Demex's team and technology to provide a risk transfer solution that is calibrated to the weather-driven loss experience of insurers. Insured SCS losses are already near $40 Billion this year, underscoring insurers' need for financial protection immediately. Demex RCR Reinsurance solution is the only mechanism in the market to reinsure SCS and other Secondary Peril losses.”
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
