Hudson Structured invests again in flood MGA reThought

Hudson Structured Capital Management, the insurance-linked securities (ILS), reinsurance, insurtech and transportation focused asset manager, has made a second investment in specialist flood underwriting managing general agent (MGA) reThought Insurance.

Hudson Structured, doing its reinsurance investment business as HSCM Bermuda, had previously participated in a $15.5 million Series A investment round for reThought Insurance.

Now, reThought Insurance, which is a technology-focused underwriting agency targeting US commercial flood risks, has raised $10.5 million in a Series B funding round and Hudson Structured participated again.

reThought said that the newly raised funding will be used to extend the distribution of its commercial and High Net Worth flood insurance products.

The company plans to further develop its technology platform, which it believes gives it the most advanced flood underwriting capability in the industry.

This Series B round was led by venture capital firm IA Capital Group, while Hudson Structured was joined by Telstra Ventures and ArcTern Ventures, both also investors in the Series A, as well as an unnamed strategiec investor.

“Recent events have underscored the growing severity and ubiquity of flood risk, and the urgency of closing the flood protection gap,” Matthew Perlman, partner at IA Capital said. “As the contours of flood risk continue to change, we’re confident the reThought team will maintain and expand its edge as the most sophisticated flood underwriter in the market, and a high-performing partner to brokers and reinsurers.”

Cory Isaacson, Chief Executive and Founder of rethought Insurance, added, “The continued support of our existing investor partners, alongside the welcome addition of new, highly experienced insurance venture capitalists is a powerful endorsement of our market-leading technological approach, especially now, when InsurTech funding is receding. The private market for US commercial flood insurance is set to grow exponentially.”

reThought said that its advanced underwriting methodology has “delivered exceptional loss ratios for its capacity partners, despite recent major flood events including Hurricane Ian and the California storms earlier this month.”

reThought has a patent-pending technology dubbed ModelConvergence, which combines and assesses outputs from a number of vendor models, allowing the underwriter to produce a granular, proprietary, view of flood risk for every building in the United States.

The strategy is to develop risk-pricing that more accurately reflects the actual flood risk, ensuring long-term capacity profitability and meeting market demand.