The MGA reThought Insurance secured a $15.5 million investment round designed to accelerate its growth in the U.S. Commercial flood insurance market.
Several investors participated in the Colorado InsurTech’s Series A round. Telstra Ventures, led the financing, which also included participation from Hudson Structured Capital Management, doing insurance/reinsurance business as HSCM Bermuda, and ArcTern Ventures.
As part of the financing, HSCM’s Andrew Sagon and Telstra Ventures’ Marcus Bartram have joined the reThought board. Existing venture funds invested in reThought include Menlo Ventures, ManchesterStory and Streamlined Ventures.
The company currently focuses on writing flood coverage for complex mid-tier commercial risks and high net worth properties but is also developing offerings for other perils. Its new cash influx will fuel continued development of software and data sources, including the firm’s proprietary model convergence engine and its high-definition risk data engine, as well as expansion of the sales team and technical resources. There will also be investment in operational capabilities to be able to handle increased volumes of business and support faster growth.
“We’re streamlining our operations and our goal is to automate the whole company,” reThought CEO Cory Isaacson said in prepared remarks. “This round of funding will further our ability to provide the best underwriting from the most comprehensive sources of data available for our capacity providers, and ultimately help us meet our goal of closing the gap for U.S. flood in ways that others have not done and cannot do, which puts us in a really unique position in the flood market.”
The startup reThought asserts that its proprietary model convergence engine lets it target a broader range of complex risks, including major public transit, underground parking garages and outdoor swimming pools. reThought also writes business interruption insurance and will work around the National Flood Insurance Program’s (NFIP) limit cap of $500,000 by covering up to tens of millions of dollars, the company said. The company claims its engineering approach to underwriting has yielded extremely accurate results, resulting in exceptionally low loss ratios and a consistent stream of added capacity providers, including last month’s partnership with Skyward Specialty to provide primary and excess limits of up to $20 million per risk.
The company launched in 2017 by way of co-founders CEO Cory Isaacson (previously CTO of RMS), Chief Innovation Officer Nicholas Lamparelli (also a partner at InsNerds.com) and President of reThought Specialty James Rice (a veteran of RMS, AIR Worldwide and Insurity), initially as a response to protecting against flood risk amid climate change.
Source: reThought Insurance