Descartes launches full-stack parametric insurer, Descartes Insurance

Descartes Underwriting, an insurance technology (insurtech) focused managing general agency (MGA) that specialises in parametric and data-driven risk transfer products, has announced the launch of a full-stack insurer, named Descartes Insurance.

Descartes Insurance is licensed as an insurer to underwrite risk by the French Regulator (ACPR) and is backed by a panel of A-rated risk carriers, the company explained.

The new full-stack parametric insurer is able to issue policies directly to mid-market clients in France, and Descartes has plans to expand this ability to include other countries in the European Economic Area (EEA) over the course of 2023.

For global clients, Descartes will continue to operate as a Managing General Agent, so there is no change for them.

“This is a huge step forward for Descartes but it also marks the evolution of the insurance sector and the way we protect customers,” Tanguy Touffut, Descartes Underwriting’s CEO and Descartes Insurance’s non-executive chairman explained.

“We seek to represent the next generation of risk transfer markets backed by industry leaders. By combining innovative insurance structures, powerful technology, and our own risk capital, we protect clients against the full spectrum of climate and emerging risks with unparalleled efficiency,” Touffut said.

Sébastien Piguet, Descartes Underwriting’s Chief Underwriting Officer, will take on the role of CEO of Descartes Insurance, while Kevin Dedieu, Descartes Underwriting’s Chief R&D Officer, will step into the position of Deputy CEO of Descartes Insurance.

Descartes believes that the new insurer will be able to provide cover and fresh capacity to a wider range of clients across France to begin and later more of Europe.

It shortens the value-chain for Descartes clients, as they will interface directly with the firms carrier and it will issue their policies.

We understand the new carrier will have its own balance-sheet, as a result of which it will be able to provide an element of leverage to Descartes, as well as to the carriers’ backing it.

This means Descartes Insurance will retain a share of all the risks it underwrites, providing for greater alignment with the carriers providing reinsurance capital to support its portfolio.

The underlying capacity is provided via quota shares with the carriers Descartes works with.

Having this new balance-sheet vehicle will allow the company to build on its own capital participation as well, should it choose, while also providing a flexible platform that Descartes could enter into relationships with third-party capital providers through, as well.

In addition, the company wants to expand its remit and it said that the launch of Descartes Insurance means its product offering “may now be expanded to include additional exposures, emerging risks, and product lines that create seamless insurance solutions issued alongside Descartes’ proven parametric structures.”

Which should allow Descartes to more tightly integrate parametric solutions alongside the more traditional, while building deeper client relationships and taking advantage of adjacent opportunities to provide coverage that emerge.

Sébastien Piguet, the CEO of Descartes Insurance, commented, “It is my firm belief that Descartes Insurance has all the resources needed to thrive in these challenging times, be it hard market conditions, the impact of climate change or the transition towards a net-zero economy. I am elated to start this new journey as a full-stack risk carrier with the support of Descartes Group’s incredible team.”

Kevin Dedieu, Deputy CEO, added that he, “View’s the launch of Descartes Insurance as the logical next step given the continued investment in our scientific team, technology and R&D to revolutionize the entire insurance process, from risk assessment to claims payment.”

Philippe Rocard, a former AXA executive and now an Independent Board Member for Descartes Insurance, said, “The parametric approach has opened a new frontier for insurance. And Descartes Underwriting is a front runner in this new world. It has developed impressive mathematical and physical knowledge to help corporations protect themselves against many perils including climate change. I am thrilled to be a member of this collective adventure.”

Descartes Chief Operating Officer, Violaine Raybaud, also said, “Since our creation, Descartes’ innovative edge stems from our ability to handle new data sources and extract value for our brokers and clients. We regard this milestone as a momentous opportunity to further infuse technology and Descartes’ science-driven, client-first approach within the core of our insurance operations.”