The Demex Group raises $10.25m for its weather and climate reinsurance solution

The Demex Group, a technology-enabled managing general agent (MGA), has raised $10.25 million through a Series A and previously closed SAFE funding round for its breakthrough weather- and climate-related reinsurance solution.

Demex offers an innovative parametric reinsurance solution that addresses the growing financial risks associated with severe convective storms – including tornadoes, thunderstorms, hail, and wind – intensified by climate change.

This solution allows insurers to safeguard their financial stability against the increasing frequency and severity of these weather events.

The risk analytics and intelligence company, collaborates with reinsurance brokers and companies to provide coverage for losses above a specific threshold.

This model, Demex stated, has been well-received by both clients and investors, resulting in $65 million of reinsurance secured during the initial sales period.

“Growing losses from these storms are a critical problem for the insurance industry – challenging insurance companies’ annual earnings and balance sheet surpluses. We’re grateful to have investors who bring climate perspective, technology capabilities, a property mindset, and insurance experience to Demex,” said Bill Clark, President and CEO of Demex.

Abe Yokell, Co-Founder and Managing Partner of Congruent Ventures, who led the round, commented: “Insurance carriers are taking significant losses from high frequency events such as thunderstorms and have been digging into their surpluses for years.

“Reinsurers, too, have experienced higher than expected losses due to secondary perils. The Demex model – developed by a blue-chip team from industry heavyweights – quantifies risk and reduces deviation, which broadens reinsurance offerings and ultimately provides a stronger insurance industry for property owners.”

Other investors include Blue Bear Capital, Moxxie Ventures and MetaProp.

“Higher frequency extreme weather events, like severe convective storms, now cause more damage than the catastrophic events that are addressed by traditional reinsurance,” said Hank Hattemer, Chief Operating Officer of Blue Bear Capital.

He continued: “Each Demex insurer customer gets a reinsurance product that is precisely calibrated to how those weather events affect its business, tuned based on its own data. No other reinsurance product that I’m aware of works like this – it is a fundamentally new product and the market response has been overwhelmingly positive.”

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