HSCM backs insurtech MGA’s ‘patent-pending’ flood risk technology
reThought Insurance, a managing general agency focused on US commercial flood risks, has raised $10.5 million in a Series B funding from re/insurer Hudson Structured Capital Management and other strategic investors for its “patent-pending” technology that offers “highly granular, proprietary” view of flood risk for every building in the US.
The capital expansion follows a $15.5 million round last summer and will be used by reThought to extend the distribution of its advanced commercial and High Net Worth flood insurance products, and to further hone its technology platform to facilitate advanced flood underwriting capability in the industry.
Existing investors Telstra Ventures, Hudson Structured Capital Management, ArcTern Ventures participated in the Series B round led by insurtech venture capital firm IA Capital Group.
reThought explained its patent-pending ModelConvergence technology combines and assesses outputs from various vendor models, to produce a highly granular, proprietary, view of flood risk for every building in the US. Each building in the US has been assigned a Flood Resilience Score between 1 and 1000, which shows how flood vulnerability may vary even between adjacent buildings. That allows risk-pricing which reflects the actual risk to ensure long-term capacity profitability and meet market demand.
reThought claims its advanced underwriting approach has delivered exceptional loss ratios for its capacity partners, despite recent major flood events including Hurricane Ian and the California storms earlier this month.
“Recent events have underscored the growing severity and ubiquity of flood risk, and the urgency of closing the flood protection gap,” said Matthew Perlman, partner at IA Capital. “As the contours of flood risk continue to change, we’re confident the reThought team will maintain and expand its edge as the most sophisticated flood underwriter in the market, and a high-performing partner to brokers and reinsurers.”
Cory Isaacson, chief executive and founder of rethought Insurance, said: “The continued support of our existing investor partners, alongside the welcome addition of new, highly experienced insurance venture capitalists is a powerful endorsement of our market-leading technological approach, especially now, when InsurTech funding is receding. The private market for US commercial flood insurance is set to grow exponentially.”
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