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Insurance tech for highly climate-exposed industries

Financial Services

The startup has solutions for car dealerships and is now working to protect solar farms too

Spotted: As climate change amplifies severe weather and associated damages, insurance premiums are becoming too expensive for many individuals and organisations. And, as weather volatility increases, insurers have an even more difficult time predicting risk, meaning they either raise costs to cover the highest risk estimates or refuse coverage because the risk is too great.

Now, US-based company Understory has created a proprietary risk mitigation technology that forms the basis of insurance coverage for vulnerable industries. These include businesses like car dealerships, which have large volumes of their inventory outside where they’re exposed to the elements and damaging weather phenomena such as hail.

Understory’s weather technology system, Dot, captures 125,000 weather metrics per second, including humidity, wind speed, and rainfall, as well as hail size, force, and angle. The global network of Dot weather stations provides leading weather risk modelling that allows Understory to accurately gauge and price the risk of a variety of weather events for any location. One Dot covers a single location such as a car lot, and the devices can be networked together to cover large spaces such as agricultural fields.

When a storm occurs, Understory’s platform automatically begins the claims process based on the weather data captured by Dot. Understory’s first product is an insurance option called the Dealers Open Lot solution. Designed and owned by car dealers, the insurance provides members with an equity stake in the company and brings members together for group buying to reduce costs. So far, Understory has helped businesses reduce claims by up to 60 per cent, as well as cut weather damage by more than $65 million.

Having recently closed an oversubscribed series A funding round co-led by True Ventures and Prelude Ventures that raised $15 million, Understory plans to put the funds towards the company’s expansion into insurance coverage for the renewable energy sector – another industry largely at the mercy of the elements. Its new tool will allow solar farms to predict hail storms, so they can take measures to protect their solar panels.

Written By: Keely Khoury

Email: info@understoryweather.com

Website: understoryweather.com

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