Local insurance startup Raincoat recently won the Verizon Climate Resilience Award for its use of cutting-edge technology to create and implement cutting-edge climate resilience solutions, technology it is currently employing in Mexico to help those affected by Hurricane Otis.
Raincoat and three other companies have been chosen through Verizon to deliver technology-based, scalable and reliable solutions that can advance climate resilience and equity in low-income communities. The award is made up of $500,000, or $125,000 depending on the company, as well as ongoing business to help them expand their responses and succeed in more communities in need.
“For us it’s an opportunity to enter the U. S. market, because we’ve been very active in the Latin American market, and the truth is that a lot of the desires that are raised in the weather sector are falling everywhere,” Jonathan Gonzalez, co-founder and CEO of Raincoat, told News is my Business.
For Raincoat, it was a favorable program because, in addition to monetary support, it presented the opportunity to work with notable organizations, he said. “That’s the main reason we applied. We were interested in working with Verizon on similar responses to the crisis, as well as some of the other organizations involved in the program.
Helping in the aftermath of Hurricane OtisThe company is actively operating in Mexico and is currently serving consumers affected by Hurricane Otis.
“We became active on Monday morning, when the effect started, and we executed the policies and bills on the spot,” Gonzalez said.
Hurricane Otis intensified explosively on Tuesday, going from a tropical typhoon to a category five typhoon in less than 24 hours before making landfall on Wednesday. During this period, its maximum sustained winds reached 110 mph.
“Unfortunately it’s not an exclusive experience. We see this on all levels, through events, whether it’s storms, wildfires, or earthquakes. It’s an unfortunate trend and it’s the explanation for why we do what we do,” Gonzalez said. .
To continue doing what it does, Raincoat raised $6. 5 million from equity investors this year, up from $5. 4 million last year. Prior to its launch in 2021, which was delayed due to the COVID-19 pandemic, Raincoat participated in several startup initiatives, adding local systems through Fundación Familia Bravo, Grupo Guayacán, and Paralelo 18.
“I’ve been a component of the local startup network for a long time,” Gonzalez said. “Puerto Rico has yet to produce its first unicorn, and I and the other founders are obsessed with making Puerto Rico a startup hub. That’s why I’m here in Puerto Rico. That’s why I built the startup here.
In addition to Puerto Rico and Mexico, Raincoat operates in Jamaica and Colombia, with plans to expand its operations to the Dominican Republic, Barbados, Brazil, the continental United States, and countries in Europe and Southern Africa.
“Our purpose is to be a global company and deliver those answers everywhere,” Gonzalez said. “We’re developing rapidly. “
The biggest barriers to its expansion come from industry inertia, assumptions and biases about how insurance works, skepticism about parametric insurance, the desire to teach businesses and consumers in each market, and political and regulatory aspects. The U. S. presents a unique set of challenges, Gonzalez said, noting that the regulatory landscape there is much stricter than in other countries.
“What makes America so special is that regulations are controlled on a state-by-state basis and not at the national level,” he explained.
“The U. S. has also been the most favorable environment for parametric products, because of a mandate or restrictions that oppose them, but because there is very little regulatory clarity about it. One of the reasons for this is that the U. S. government has a lot of safety nets, like [the Federal Emergency Management Agency (FEMA)]. For this reason, there is no desire to innovate as temporarily as other countries when it comes to new solutions, because there is a kind of assumption that this challenge will be solved. through the government,” Gonzalez said.
The Raincoat policy will be amortized immediately. Raincoat specialises in state-of-the-art parametric insurance, predictive insights and providing insurance to those affected by severe weather events.
The company was born in the aftermath of Hurricane Maria, which devastated Puerto Rico in 2017, causing deaths, injuries and more than $90 billion in damage. The typhoon left thousands of homes and businesses without infrastructure for months, severely affecting the local economy. .
In the wake of this crisis and the insurance chaos that followed, Raincoat developed a home, business, and potential loss of income insurance product that will pay within days of a natural crisis without having to file a claim. Instead of relying on Raincoat, an adjustment procedure that can take years and result in a 0 payment, it uses complex climate models for quick bills based on estimated losses.
Natural crisis insurance is typically included in popular home and business interruption insurance policies, but they concentrate on asset damage, take years to process, involve a lot of exclusions, and don’t cover what policyholders want most. Parametric insurance covers an insured who objects to the occurrence of an express event, rather than the magnitude of the losses in a classic indemnity policy.
Raincoat consumers sign an insurance policy online and provide a physical address. The company then monitors that location with real-time environmental data and complex models that interpret this complex data. Raincoat makes a payment within days of an event.
As parametric insurance corporations emerge, Raincoat’s competitive merit lies and will continue to be its staff, Gonzalez said.
“I think we have a world-class team, actually, world-class,” he added. “Our chief insurance officer . . . our scientists and the categories they fall into, their PhDs, very explicit and exclusive attributes. We also have partners that we work with, who accept us and help us,” he said. “Our competition deserves to reflect our team and the track record we’ve had. “
Learn more about the Verizon Award Launched in 2021, the Verizon Climate Resilience Award is an initiative to scale market-proven solutions focused on mitigating the disproportionate effects of climate change on communities. This year, the company presented its Climate Resilience Award to Raincoat, Sesame Solar. , 10Power and Perimeter.
“With a new insurance product, San Juan-based Raincoat aims to democratize access to monetary resilience in the face of natural disasters,” Verizon said in a statement. “The Raincoat project protects each and every user on the planet from monetary disruption caused through herbal disasters. “
Sesame Solar replaces fossil fuel-powered turbines with cellular and renewable energy responses that are sustainable, easy to use, and flexible for a variety of use cases, Verizon reported. 10 Power’s renewable energy projects build climate resiliency through on-site power generation and storage, while Perimeter facilitates data sharing and collaboration, making real-time evacuation control software available to first responders and the public, Verizon said.
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