The investment aims to launch their groundbreaking Retained Climate Risk Reinsurance (RCR Re) solution into the market.

Blue Bear Capital, a venture and growth equity firm with a strong focus on global climate challenges, has been a significant partner for Demex since 2021.

Bill Clark, CEO of Demex, stated, “Severe convective storms (SCS) cause accumulated losses in midwestern states that exceed hurricane losses in coastal states. SCS loss accumulation increasingly causes earnings unpredictability, credit rating downgrades, and even insolvency for insurance companies.

“Our reinsurance broker distribution partners and our risk capacity network are eager to address this risk and Demex RCR Re is the first purpose-built solution designed specifically for severe thunderstorms.”

Revolutionising Reinsurance Placement with Tremor

Meanwhile, RCR Re is currently accessible and swiftly becoming a pivotal element in insurers’ reinsurance strategies as they prepare for the year 2024.

It’s evident that there exists a well-documented protection gap concerning SCS and other ‘secondary’ weather-related risks, including winter storms, heatwaves, cold snaps, droughts, and floods.

Secondary perils play a vital role in propelling global insured losses that have now exceeded the losses incurred by ‘primary’ catastrophic perils like hurricanes and earthquakes.

Moreover, the heightened frequency of secondary perils is taking a toll on the financial health of insurance companies.

Cumulative losses from secondary perils have reached $1.1 trillion since 2000, surpassing the $880 billion losses stemming from primary perils during the same timeframe.

Hank Hattemer, COO of Blue Bear Capital commented: “Blue Bear is excited to lead this round for Demex given the unequivocal opportunity for Demex’s team and technology to provide a risk transfer solution that is calibrated to the weather-driven loss experience of insurers.

He added: “Insured SCS losses are already near $40 Billion this year, underscoring insurers’ need for financial protection immediately. Demex RCR Reinsurance solution is the only mechanism in the market to reinsure SCS and other Secondary Peril losses.”