Reinsurance solutions provider The Demex Group has secured a funding of $5m  to bring retained climate risk reinsurance solutions to the market.

The funding round was led by venture and growth equity firm Blue Bear Capital and saw the participation of various other new and existing investors. 

Blue Bear Capital, a key partner of Demex since 2021, focuses on climate issues globally.

The retained climate risk reinsurance (RCR Re) is intended at addressing more than $50bn yearly insured loss caused by ‘secondary’ natural calamities.

This solution is available currently with the company anticipating make it an essential part of the reinsurance programmes of insurers by 2024.

Demex CEO Bill Clark said: “This additional investment empowers us to deliver new weather risk transfer capabilities to insurance companies that are facing escalating losses due to the increased frequency of non-catastrophic weather events. 

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“Severe convective storms 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 DemexRCR Re is the first purpose-built solution designed specifically for severe thunderstorms.” 

Established in 2020, Demex delivers stop loss coverage for secondary perils, leveraging a proxy claims index. 

By modelling, organising, and resolving the build-up of weather-linked small- and medium-sized claims, the company aids insurers in managing attritional climate risk.