Climate risks MGA Descartes raises $120m, targets global growth

A managing general agency (MGA) that specializes in leveraging parametric solutions to address climate and emerging risks has raised $120 million in Series B funding – money it plans to use to build a global footprint.

Paris-based Descartes Underwriting is structured as an MGA backed by a panel of tier-one risk carriers. Able to provide $200 million in capacity per policy, it collaborates with brokers to protect their corporate and public sector clients against natural catastrophes, extreme weather and emerging risks.

Its parametric insurance solutions are designed to increase transparency in this form of coverage and pay out faster than traditional products. They leverage new data sources and artificial intelligence to challenge traditional insurance models.

The $120 million Series B funding round was led by growth equity firm Highland Europe alongside international investment company Eurazeo. The funding included the participation of existing investors: Serena, Cathay Innovation and Blackfin Capital Partners and new entrants Seaya Ventures and Mundi Ventures. The fresh round of capital comes 18 months after the firm’s $18.5 million Series A funding.

The investment will be used to grow its technology platform, expand into new lines of business and target larger deals, while continuing its global expansion.

“The corporate insurance market is undergoing a momentous shift driven by a changing climate, the growing impact of natural catastrophes and a rise in emerging risks”, said Tanguy Touffut (pictured), CEO and co-founder of Descartes Underwriting.

“Our aim is to be the global leader in delivering truly revolutionary solutions to brokers, corporations and public entities for these evolving exposures. With the support of our partners, we will continue to develop and deploy a new generation of insurance products that are entirely tech-driven, simpler, more transparent and quicker to pay in the event of a loss – adapted for the new risks corporations and governments increasingly face.”

Touffut added: “We are proud to work with Highland Europe, Eurazeo, Seaya and Mundi Ventures, all of which have incredible track records and an entrepreneurial mindset, making them the perfect match for us to scale with. We are also grateful for the continued support of our existing investors, Blackfin Capital Partners, Serena and Cathay Innovation, each of which has been integral to our incredible success to date.”

Stan Laurent, Partner at Highland Europe, commented: “Tanguy, Sébastien and Kevin have developed the most innovative and successful set of insurance products we have seen in the increasingly relevant climate risk sector. We are impressed by their team, culture, set of partners and ambition, and look forward to helping them scale as a global next generation corporate insurance business.”

Guillaume d’Audiffret, managing director at Eurazeo, further added: “With climate change and many other emerging risks including most recently the pandemic, corporates and public sector companies are increasingly experiencing the need to access comprehensive and transparent insurance that can cover them efficiently against critical external events. Since its inception three years ago, and thanks to its highly experienced team, Descartes has become a clear category leader in the parametric insurance market. We look forward to supporting Tanguy, Sébastien, Kevin and their full team in redefining the corporate insurance market for the years to come.”

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