Insurtech Understory expands parametric hail insurance
Understory, an insurtech operating in weather and data analytics, has expanded its new supplemental hail insurance product for automotive dealers in five new states: Arizona, New Mexico, Ohio, Pennsylvania and Wyoming.
The company launched Auto – Hail Safe in November 2019. With the expansion the product is now available to dealerships in 18 states. It is a parametric hail insurance product that allows automotive dealers to cover vehicles damaged in a hail storm. Understory’s sensor networks track weather in real-time, collecting data that insurers can use to streamline and execute processes based on actual property-damage information.
“We explored parametric insurance in many different areas and found an incredibly strong hunger within the U.S. auto industry,” said Alex Kubicek, CEO of Understory. “Auto dealers in particular have been especially hard hit by the growing severity and frequency of hail storms.”
According to the National Oceanic and Atmospheric Administration, more than 4,600 destructive hailstorms hit the United States in 2018 alone, resulting in more than $8 billion of damage. This led insurers to pull out of areas affected by hail.
“We learned that with few insurance coverage options, auto dealers in high-risk hail states were facing up to 600 percent insurance cost increases, including several thousand-dollar deductibles per vehicle,” he continued.
Understory is partnering with international weather risk manager MSI GuaranteedWeather to bring the product to market. “Building on Understory's comprehensive weather database and risk model, MSI GuaranteedWeather's experience in developing global weather risk solutions and unique analytic capabilities allow Auto – Hail Safe to offer quick payouts and no adjustment following hailstorms,” Kubicek explained.
The product is available to auto dealerships through a network of insurance brokers across the country. To promote the new offering, Understory is using a variety of marketing channels including digital, social and event marketing,