Tech-enabled MGA reThought Insurance has completed a $15.5 million Series A investment round that will help fund its rapid growth in the flood insurance market. Led by Telstra Ventures, the fundraising also includes participation from Hudson Structured Capital Management, doing (re)insurance business as HSCM Bermuda, and ArcTern Ventures. HSCM’s Andrew Sagon and Telstra Ventures’ Marcus Bartram have joined the reThought board. Existing venture funds invested in the insurtech include Menlo Ventures, ManchesterStory and Streamlined Ventures.
reThought currently focuses on writing flood coverage for complex mid-tier commercial risks and high net worth (HNW) properties but is also developing offerings for other perils. The raise will provide funding for the continued development of software and data sources, including the firm’s proprietary model convergence engine and its high-definition risk data engine, as well as expansion of the sales team and technical resources. There will also be investment in operational capabilities to be able to handle increased volumes of business and support faster growth.
“We’re streamlining our operations and our goal is to automate the whole company,” said reThought CEO Cory Isaacson. “This round of funding will further our ability to provide the best underwriting from the most comprehensive sources of data available for our capacity providers, and ultimately help us meet our goal of closing the gap for US flood in ways that others have not done and cannot do, which puts us in a really unique position in the flood market.”
Currently, 85% of commercial and residential properties in the US do not have flood coverage. Flood premiums in the US average $7 billion, yet losses are reported at $15 billion annually with the potential to rise due to the impact of climate change. The market is expected to reach $41 billion by 2024. reThought’s unparalleled proprietary model convergence engine allows the company to target a broader range of complex risks, including major public transit, underground parking garages and outdoor swimming pools. reThought also writes business interruption insurance and will work around the National Flood Insurance Program’s (NFIP) limit cap of $500,000 by covering up to tens of millions of dollars.
“Telstra Ventures is excited to be investing in and supporting the team at reThought, an emerging leader in flood insurance MGAs,” said Marcus Bartram, General Partner at Telstra Ventures. “Climate change is rapidly driving increasing risk around the globe. Building new models that apply data and technology is necessary and that is why we invested in Cory Isaacson and his extraordinary team that bring deep knowledge and problem-solving skills.”
reThought launched in 2017 by co-founders CEO Cory Isaacson, Chief Innovation Officer Nicholas Lamparelli, and President of reThought Specialty James Rice, as a response to protecting against flood risk amid climate change. The company’s unique engineering approach to underwriting has yielded extremely accurate results, resulting in exceptionally low loss ratios and a consistent stream of added capacity providers, including last month’s partnership with Skyward Specialty to provide primary and excess limits of up to $20 million per risk.
About reThought Insurance
reThought Insurance was founded in 2017 by insurance and insurance technology professionals and is a technology-centric Managing General Agent (MGA) focused on US commercial flood risk. For more information on how reThought has re-imagined flood insurance, please visit www.rethoughtinsurance.com
About Telstra Ventures
Telstra Ventures identifies what’s next, right now. Telstra Ventures serves extraordinary leaders and helps them achieve their dreams. In our first nine years, 70+ investments have generated 28 liquidity events including Auth0, BigCommerce, Box, Cloopen, CrowdStrike, DocuSign, Rancher, Skillz, Snap, and Whispir. To date, our Revenue Bearing Relationships have driven >US $340 million in revenue, extending the reach of our portfolio companies across Australia and Asia. In 2018, Telstra Ventures became an independent firm backed by LPs including HarbourVest, the US $70B AUM private equity investment platform and Telstra is the US $30B market capitalization communications services company, headquartered in Australia. To see our full portfolio and learn more, visit telstraventures.com.
SOURCE reThought Insurance