Hedging against extreme weather events
Your home or business insurance could soon come with innovative options for extreme weather thanks in part to platforms developed by climate risk management companies like The Demex Group.
Driving the news: The company uses a combination of meteorological know-how, risk analysis, software development and relationships with insurers to help distribute the monetary risk that extreme weather events pose.
The big picture: Such events, particularly temperature and precipitation extremes, are worsening due to human-caused climate change. Transferring that risk from business owners, and spreading it across the insurance industry, could be a way to help manage a riskier future.
Between the lines: On Thursday, The Demex Group announced it had raised $9 million in Series A funding. Last month, it also rolled out a unique partnership with Vave, an insurance API service platform. Under the partnership, the companies will offer extreme temperature insurance to commercial properties nationwide.
- The product is designed to provide up to $1,000 of cash immediately when the temperature hits a certain threshold, according to a statement, giving business owners a bridge to cover the gap before traditional insurance might reimburse for physical damage.
What they're saying: "What we have found is that there's a sort of a gap period where when the event occurs, it takes a little while to get the insurance money flowing," Stephen Bennett, chief climate officer at The Demex Group, told Axios.
- Bennett said the company is working to offer similar products for precipitation, heat and other extreme events.