Descartes Underwriting, an insurance tech company specializing in climate risk modeling and transfer, today announced it has raised $18.5 million. A spokesperson told VentureBeat the funding will be used to support Descartes’ global expansion into the U.S. and Asia, as well as the opening of new offices in New York and Singapore.
Injecting insurance processes with AI isn’t a new idea, but it could ease uncertainty around the pandemic. The Paris-based firm claims it leverages various sources — including internet of things and remote sensing devices — that feed into AI and computer vision algorithms to make predictions about risk.
Descartes works with brokers, insurers, and reinsurers to come up with property and casualty insurance solutions across industries and geographies. For a limited number of insurance partners, the company also designs custom solutions with pricing engines, backends, and APIs.
Descartes is somewhat flexible in terms of the property and casualty risks it covers, but it principally deals in business interruption following natural catastrophes (like cyclones, earthquakes, and floods) and financial losses caused by wildfires, droughts, high or low temperatures, and high rainfall. It’s also business-agnostic and operates across agriculture, mining, construction, energy, banks, entertainment, and retail segments.
The insurance tech market is red hot. Last year, online platform Next Insurance, which targets small business owners with a focus on specific niches (like landscaper insurance and personal trainer insurance), raised $250 million. In March 2019, Washington, D.C.-based workers’ compensation insurer Pie Insurance brought in $45 million, just a month after CoverHound nabbed $58 million. And in June, Planck raised $16 million for its AI-powered commercial risk insurance platform.
But cofounder and CEO Tanguy Touffut says business is booming. In 18 months, Descartes, which has 20 employees and expects to have over 50 by the end of 2021, signed on close to 100 corporate customers including several in the Fortune 500.
“This raise will fuel our ambition to become the global leader in parametric insurance solutions for large corporations and governments,” Touffut told VentureBeat via email. “The corporate insurance segment is ripe for disruption as technological intensity and innovation capabilities are taking off. We want to play a central role in providing innovative and tech-driven solutions to our brokers and clients.”
Serena led the funding round, with participation from Cathay Innovation and BlackFin Capital Partners. It brings Descartes’ total raised to $21 million, following a $2.5 million seed funding round from BlackFin last year.