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Vave, Demex team up on parametric extreme-temperature insurance

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InsurTech MGA Vave Partners has joined forces with technology company The Demex Group to offer extreme temperature insurance to commercial properties in the US.

In a statement, both companies said the embedded insurance model combines the risk analytics of Demex and the data-driven insurance offerings of Vave into “robust, climate resiliency insurance”.

Vave’s insurance product will use Demex’s analysis and pricing technology to provide policyholders with up to $1,000 in immediate cash during intense temperature events.

Extreme temperature coverage is parametric, the companies explained, meaning claims are directly linked to temperature. When the temperature passes a predefined threshold – for example, below 20°F in the winter – a claim is immediately triggered.

Payment is automatic, and the claim amount will correspond to the severity of the event. More extreme events drive larger losses and lead to higher claim payments.

Demex CEO Ed Byrns said: “At Demex, we believe insurers will lead the way helping people manage the effects of climate change.”

He added: “We're excited to launch this product because we see it as one of the first major steps to create climate resilience for policy holders.”

Vave head of product Robert Porter added: “The addition of Demex parametric weather cover to the Vave Commercial Property Product will give small businesses increased peace of mind they can continue to operate following extreme weather.

“Our collaboration with Demex continues the Vave tradition of finding innovative ways to offer consumers enhanced coverage.”

Elsewhere in the market, parametric InsurTech Arbol recently announced the launch of Arbol Underwriters (AUL), a Bermuda-based insurance agent that will focus on matching reinsurance capacity with parametric insurance risks.

In January, AUL parent Arbol raised $7mn in a Series A funding round, led by Abu Dhabi sovereign fund Mubadala and with the participation of existing investors Finch Finance and Space Capital.

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