Nephila invests in climate risk data analytics specialist Jupiter

Leading ILS fund manager Nephila Capital has participated in Series B funding and signed up to use predictive data and climate risk analytics tools offered by Jupiter, a technology company focused on helping users better understand and manage climate-related risk.

Jupiter recently raised a $23 million Series B funding round in which Nephila Capital participated, alongside other insurance and reinsurance industry stalwarts including Mitsui MS&AD, QBE, as well as private equity specialists and venture funds.

“These investments from leaders in the energy, infrastructure, insurance, financial services and consulting industries underscore the urgent need to regularly quantify and assess climate-related physical risk using forward-looking analytics,” explained Rich Sorkin, CEO and Co-Founder of Jupiter. “Influential investors from the U.S, EU, Asia and Australia highlight the global nature of Jupiter’s business and the rapidly growing demand for Jupiter’s broad portfolio of high-resolution, AI-enabled climate risk applications. Jupiter’s elastic exascale computing provides unlimited capacity, enabling hyper-local risk analyses for the entire planet.”

It’s not the first technology investment that Nephila has made, as the ILS management company recognises that certain tech or insurtech initiatives can offer significant growth and enhance the managers own access to risk, or understanding of that risk.

Jupiter helps companies through provision of data and analytics that assist them in better predicting and managing risks from extreme weather, sea-level rise, storm intensification and rising temperatures caused by medium- to long-term climate change.

It seems likely that the enhanced climate risk analytics that Jupiter can offer are particularly attractive to Nephila as they can assist in its understanding of risks, helping it to expand its underwriting and grow its portfolio of climate and weather related risk investments.

Following the capital raise, Jupiter has worked to expand its product range, their sophistication and added key client partners, including Nephila itself.

Jupiter said that among the new partnerships it has signed up are two of its investors, insurance giant QBE and insurance-linked securities (ILS) leader Nephila Capital.

“Nephila seeks to provide efficient capital solutions to weather and climate risks that affect all market sectors and economies globally,” explained Barney Schauble, Chairman of Nephila Climate, the climate and weather focused arm of the largest ILS firm.  “We’re working to apply Jupiter’s state-of-the-art capability to predict extreme weather risks to businesses seeking protection, especially in the utilities and public sectors.”

Jupiter has recently introduced its ClimateScore™ 2.0 Intelligence Platform, which access to its Floodscore product that now also includes predictions for short-term and hyper-local flooding risk.

In addition HeatScore™ has also been added, to predict the increasing risk of more frequent and intense extreme heat wave type events. Coming soon are FireScore™ Planning and Operations and WindScore™ risk prediction products in 2019, the company said, with multiple additional perils also targeted for inclusion within the Jupiter range of data and analytics services.

“Jupiter continues to expand its scope and services into new perils, geographies, and industry verticals,” CEO of Jupiter Rich Sorkin, CEO said. “November’s National Climate Assessment Report and the recent UN Global Linkages Arctic study clearly highlight the urgency of adaptation efforts to respond to the immediate and future state of a changed climate.”

“The increasing frequency and devastation of events like Hurricane Michael and the 2018 California wildfires are another wake-up call for businesses to incorporate climate risk into their planning,” he continued. “Climate change will affect every aspect of human industrial capacity — including the reliability of the power grid, supply chain management, and maintaining adequate food and water supplies. Quantifying and responding to the risks associated with climate change is now essential.”

“With each passing year, it becomes clearer that the insurance industry must factor climate change into its underwriting and pricing practices. Climate change affects everything we do as a company,” David McMillan, Group Chief Operations Officer at QBE commented. “Jupiter and QBE are collaborating to improve underwriting and pricing processes and offer climate risk adaptation expertise to our customers.”

The Jupiter suite of products has expanded rapidly, offering significant new insights to its users.

Of course, users need to have the ability to translate these climate and weather insights into actionable business strategy, something that Nephila Capital and other insurance or reinsurance users have significant experience in doing.

Jupiter said that its ClimateScore platform now brings together data analytics with weather, hydroscience, heat, fire and climate models.

It also offers articifical intelligence (AI)-driven insights on climate risk, and incorporates machine-learning techniques within the platform as well, leveraging data from millions of ground-based and satellite sensors to run multiple linked prediction models to deliver hyper-local risk analyses.

This kind of technology can significantly help on looking at weather and climate linked insurance risk at a more granular level, which is absolutely key to those seeking to create and manage portfolios of these risks for third-party investors.

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