The Demex Group, the technology company behind a first-of-its-kind platform for analyzing, pricing, and transferring climate-linked risks at scale, and Vave, an algorithmic underwriting managing general agent and insurance API service platform, have announced a partnership to deliver extreme temperature insurance to commercial properties across the United States.
Climate change is driving increased extreme weather, including harsh winter cold snaps and summer heat waves. Small-to-medium business owners feel this acutely – extreme temperature events result in lost revenue and unforeseen expenses in the form of higher utility bills, higher operating costs, and higher supplier costs. In February 2021 alone, the U.S. extreme cold snap cost an estimated $20.8 billion in economic damages and led to 172 deaths. Vave’s extreme temperature insurance is powered by Demex and designed to provide up to $1,000 of immediate cash during intense temperature events.
By embedding Demex technology within Vave’s new commercial offering, policy holders are seamlessly protected from the costs of extreme climate events. This embedded insurance model combines the climate risk analytic expertise of Demex and the data-driven insurance offerings of Vave into robust, climate resiliency insurance. Extreme temperature coverage is parametric, meaning that claims are directly linked to temperature. When the temperature passes a predefined threshold – for example, below 20°F in winter – a claim is immediately triggered.
Payment is automatic, without need for a time- consuming adjustment process. The claim amount corresponds to the severity of the event. More extreme events drive larger losses and lead to higher claim payments. Policies are calibrated, based on hyper-local weather trends. Extreme weather insurance integrates property-level weather in nearly 42,000 zip codes with underwriting algorithms and estimates the climate risks at every Vave policy in the United States.
“At Demex, we believe insurers will lead the way helping people manage the effects of climate change. 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,” said Demex CEO Ed Byrns.
“The addition of Demex parametric weather cover to the Vave Commercial Property Product will give small businesses increased peace of mind that 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,” said Vave Head of Product Robert Porter.