Disaster insurance startup Raincoat secures seed funding
Raincoat, a Puerto Rico-based startup that makes white-label insurance software, raised $4.5 million in seed funding, the company tells Axios.
Why it matters: Traditional insurance providers aren't set up to handle the waves of climate change–caused weather events, and insurtech startups are eager to experiment with nontraditional models.
Details: Anthemis Group led the all-equity round that closed in June. Raincoat CEO Jonathan Gonzalez declined to disclose the round's valuation.
- SoftBank Group’s SB Opportunity Fund, Puerto Rican banking leader Banco Popular, Chilean financial group Consorcio, Miami-based 305 Ventures and New York’s Divergent Capital also participated in the round.
How it works: Raincoat makes modeling software for parametric insurance products, which pays out a predetermined amount should a qualifying event occur.
- Parametric models remove the need for claims adjusters, which can often take months during high volume claims events like natural disasters and can delay essential repairs.
Yes, and: Gonzalez says that he sees parametric models replacing traditional insurance policies as natural disasters become more common and high volume events overwhelm traditional insurance providers that don't take other metrics like quality of life or lost earnings into account.
- Gonzalez, who moved back to Puerto Rico months before Hurricane Maria devastated the island, sees traditional insurance that focuses on asset valuation then becoming more automated.