Munich Re, Nephila capacity backs insurtech Demex manage climate risk

The Demex Group, an insurtech company that offers financial risk solutions to enhance climate-resilience, has secured seed investment from Anthemis and IA Capital, as well as backing capacity from Munich Re and Nephila Capital.

Demex has raised $4.2 million in seed funding from financial services investors Anthemis and IA Capital Group.

Munich Re Trading (MRTL) and Nephila Climate, the weather and climate risk-focused business unit of Nephila Capital, have partnered with Demex to provide weather risk capacity and back office support to the insurtech.

MRTL and Demex have previously developed select customised weather index-linked hedging instruments to help businesses manage non-catastrophic weather risks.

Demex seeks to develop cutting-edge technology and customised financial solutions that mitigate unique weather risks and seize climate-linked business opportunities.

The company plans to use the funds to build out its team and to support go-to-market for municipalities and enterprise customers, which include Fortune 500 property managers with highly volatile year-to-year snow-removal expenses.

"Corporates, large and small, need balance sheet protection against non-catastrophic climate risks. Demex is, by far, the most sophisticated solution to this problem existing in the market, in terms of calibrating and transferring climate risk. They will transform how the insurance industry thinks about weather resilience," said Ruth Foxe Blader of Anthemis.

Matt Perlman, Partner at IA Capital Group, added: "Managing operational climate risk is quickly becoming an imperative for businesses across a growing array of industries. The Demex Group's ability to analyze a client's specific exposures in a very granular way and generate a precisely calibrated risk transfer solution goes far beyond traditional weather derivatives and represents the frontier of parametric insurance."

David Stevenson, CEO and president of MRTL, said: "Innovation and technology can help businesses become more resilient and better manage the impacts of extreme weather. We are excited to witness the next chapter as our colleagues grow and expand their business to help customers mitigate the risks associated with unpredictable snowfall."

Matt Coleman, director of strategic partnerships at Nephila Climate, said: "The technology that Demex has developed, combined with its knowledge of weather and financial risk, can help institutions better understand and manage the risks they hold."

Ed Byrns, founder of CEO, commented: "Our customers know that extreme weather drives unwanted fluctuations on their bottom line. We are building a world where financial resiliency to climate is as simple as the tap of a credit card."