Climate resilience insurtech Demex raises $4.2m in seed capital
The Demex Group, a technology company that offers financial risk solutions to enhance climate-resilience, has raised $4.2 million in seed funding from Anthemis and IA Capital Group.
The Demex Group operates at the intersection of banking and insurance, bringing together decades of experience across technology, finance, risk management, capital markets, commodities, insurance and climate science. It develops technology and customised financial solutions to mitigate unique weather risks and seize climate-linked business opportunities.
It has worked alongside Munich Re Trading (MRT) to develop customised weather index-linked hedging instruments to help businesses manage non-catastrophic weather risks. MRT provides risk capital and back office support to Demex as it innovates in the climate and weather risk management industry.
Demex has also partnered with Nephila Climate, the weather and climate risk-focused business unit of Nephila Capital, which offers weather risk capacity backing Demex’s financial products.
The funds Demex has raised will be used to build out its team and to support go-to-market for municipalities and enterprise customers, which include Fortune 500 property managers with highly volatile year-to-year snow-removal expenses.
The World Economic Forum’s Global Risks 2020 report identified extreme weather events, natural disasters and failure of climate change mitigation and adaptation among the top five global risks, for both impact and likelihood of occurrence within the next ten years.
Anthemis' Ruth Foxe Blader noted the need for balance sheet protection against non-catastrophic climate risks among corporates. “Demex is, by far, the most sophisticated solution to this problem existing in the market, in terms of calibrating and transferring climate risk. They will transform how the insurance industry thinks about weather resilience,” she said.
Matt Perlman, partner at IA Capital Group, added: "Managing operational climate risk is quickly becoming an imperative for businesses across a growing array of industries. The Demex Group's ability to analyse a client's specific exposures in a very granular way and generate a precisely calibrated risk transfer solution goes far beyond traditional weather derivatives and represents the frontier of parametric insurance."
David Stevenson, chief executive and president at MRT, emphasised the role innovation and technology can play in helping businesses become more resilient and better manage the impacts of extreme weather.
Matt Coleman, director of strategic partnerships at Nephila Climate, said: “The technology that Demex has developed, combined with its knowledge of weather and financial risk, can help institutions better understand and manage the risks they hold.”
Ed Byrns, founder and chief executive at Demex, said: "Our customers know that extreme weather drives unwanted fluctuations on their bottom line. We are building a world where financial resiliency to climate is as simple as the tap of a credit card."
