Insurtech develops new climate risk tools
FutureProof Technologies, the climate-smart P&C insurtech, has raised $6.5 million in capital led by Axis Digital Ventures, which works across Axis’ underwriting units to develop and grow strategic partnerships with insurtechs and other innovators.
Prior investors Innovation Endeavors and MS&AD Ventures also participated, taking FutureProof’s total capital raised to nearly $10 million.
Alisa Valderrama, co-founder and CEO at FutureProof, said: “As climate risk escalates, and natural disasters continue to cause unprecedented levels of financial losses, it will widen the coverage gap and propagate under insurance.
“The insurance industry knows it needs a new generation of underwriting, pricing, and portfolio management tools for managing weather- and climate-related P&C risk.
“Our underwriting will help close the coverage gap and increase financial resilience to climate-linked losses from hurricanes and floods. Pricing this risk will create incentives to invest in climate adaptation measures.”
Using cutting-edge artificial intelligence techniques, FutureProof said, it predicts wind and flood losses using a broader swath of predictors that yields uniquely high-resolution predictions with highly accurate out-of-sample performance.
With FutureProof’s algorithmic underwriting, the industry will be able to select, price, and manage risk more profitably in near-real-time.
“This capital raise enables us to add top underwriting, portfolio risk management, and engineering talent as we launch FutureProof’s digital MGA later this year,” said co-founder and chief insurance officer Fid Norton.
“Our ground-breaking technology will improve the profitability and return on equity for our carrier and reinsurance partners, and the algorithmic underwriting engine we build to deliver our results will provide faster quotes to our wholesale broking partners.”
Linda Ventresca, chief strategy officer for Axis Capital, said: “FutureProof is a trailblazing start-up that will provide innovative climate risk underwriting solutions to the market.
“Axis Digital Ventures is proud to partner with FutureProof and support its mission, which aligns with our own business priorities, beliefs and values.
“At Axis, we believe the re/insurance industry has a critical role to play in addressing climate change and we share FutureProof's commitment to building a more climate-resilient world.”