American catastrophe insurance managing general agency (MGA) Delos Insurance Solutions has raised $5.3m in a seed funding round led by IA Capital.
The round also saw participation from Avanta Ventures, Red Dog Capital, a group of strategic investors led by insurance executive Jonathan Crystal, and Futureland Syndicate.
Delos, which is focused on California wildfire-related risks, will use the funding to expand within the California homeowner’s insurance market.
Delos’ proprietary underwriting technology is said to enable insurers to ‘profitably’ insure homes within areas that incumbent insurance companies had considered as high risk for wildfire.
Its underwriting model works by quantifying wildfire risk under a wide range of actual and hypothetical scenarios.
The machine learning algorithms use satellite images and other data sources to identify and quantify relationships among factors such as vegetation condition, ignition sources, weather, terrain, and loss mitigation measures.
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Delos has integrated catastrophe modelling and climate modelling expertise vertically into all levels of the company to adapt and react quickly.
IA Capital partner Matt Perlman said: “We are impressed by the robust science behind Delos’ innovative wildfire underwriting model. Delos has developed a creative and viable solution to the persistent problem of insuring homes in areas under threat of wildfire.”
Delos co-founder and CEO Kevin Stein said: “With this round of financing, Delos can go much further in achieving its dual mission of making reasonably priced insurance available to California homeowners while providing insurers and reinsurers a reliable stream of profitable revenue.”
The insurer noted that its underwriting technology can be used to cover other catastrophic events as well.