Descartes raises $18.5m Series A to scale up parametric insurance

Descartes Underwriting, the insurance technology (insurtech) focused managing general agency (MGA) that specialises in parametric and data-driven risk transfer products, has raised Series A capital from leading investment firms to help it to scale up the parametric insurance space.

Descartes Underwriting launched in early 2019, with a focus on parametric risk transfer and leveraging advanced technology to create new commercial insurance and reinsurance solutions, as well as an ambition to utilise the ILS market as a source of capacity.

The parametric, data-driven MGA raised around $2.5 million in seed funding from fintech-focused venture investing firm BlackFin Capital Partners around 18 months ago.

Now, Descartes has secured the necessary funding to give it a long runway and the ability to invest significantly in growing its parametric risk transfer activities, with an $18.5 million Series A funding round from leading global venture capital firms Serena, Cathay Innovation and once again BlackFin Capital Partners.

“This is a good time to further expand our footprint. Non-life insurance is going through an existential crisis due to the growing impact of climate change and the Covid-19 pandemic: in addition to large losses, the sector is suffering from a lack of trust,” explained Tanguy Touffut, CEO and Co-founder of Descartes Underwriting. “With the support of our partners, we aim at rebuilding customer trust through a new generation of products that are tech-driven, fully transparent and providing swift claims payment.”

The capital raised will be used to support Descartes’ global expansion to the United States and Asia marketplaces. .

Headquartered in Paris, Descartes already covers a wide variety of geographies including Europe, North America, Latin America and Asia. But with the funding now plans to open new offices in New York and Singapore, to assist it in driving further growth into those key regions.

The funding will also be used to expand the Descartes product range, to target larger deals and also to deepen its technological capabilities and data science team.

Touffut added, “This investment will fully support our ambition to grow and lead the global parametric insurance space in the corporate segment. We are proud to work with Cathay Innovation and Serena, both of which have incredible track records, an entrepreneurship mindset and are the perfect match to support our global development.”

Marie Brayer, Partner at Serena added, “Descartes Underwriting has the rare potential to offer a good, transparent alternative to a multi-billion dollar industry as well as to provide emerging countries and global industry leaders with options to face global climate change with more resilience. We are really proud to back such an amazingly talented team.”

Jacky Abitbol, Partner at Cathay Innovation, also said, “Climate change is a massive challenge for many businesses through the World. By providing innovative parametric insurance products, Descartes Underwriting’s experienced team is supporting corporates of all size to cope with growing weather-related vulnerabilities. We are thrilled to support Descartes’ visionary management as they bring their next-gen AI solutions to the global stage. Together, we will make a positive impact to the insurance sector and to the world through technology.”

Julien Creuzé, Managing Director at BlackFin Capital Partners, commented, “We are very happy to continue backing Descartes Underwriting and its stellar team which develop truly innovative insurance products for large corporates. Descartes Underwriting is one of the fastest growing insurtechs, we are glad to see Cathay and Serena joining forces with existing stakeholders to support its global expansion.”

Descartes Underwriting’s goal is to disrupt the insurance industry by scaling up parametric insurance, leveraging new technologies and data science and challenging traditional insurance models.

Founded by a team of experienced executives from the insurance and reinsurance market, Descartes works with corporate brokers to design and underwrite parametric structures that make for bespoke and affordable insurance solutions.

In the 18 months since the companies launch, close to 100 corporates around the world, including Fortune 500 companies, and governments, have already chosen Descartes’ to help them in building resilience in the face of climate change and other natural catastrophes.

Companies like Descartes present a new breed of parametric risk transfer specialists, looking to create new products using technology and data analytics, to provide more effective and efficient risk transfer that meets clients needs.