US insurtech builds blockchain-powered parametric cargo platform

24 October 2022

Brooklyn-based insurtech Otonomi has successfully raised $US3.4 million ($5.32 million), backing its parametric cargo-delay insurance offer.

Traditionally, insurance has been focused on damages to goods. However, costly delays often arise across air, maritime, trucking, and last-mile logistics, says Chris Shonk, Partner at ATX Ventures Partners, which participated in the funding round.

“Otonomi is building complex models to be able to profitably underwrite insurance against delays in shipments of freight,” he said. “A great team is positioned to bring together aspects of parametric insurance, risk related to supply chain and shipment delays, and highly embeddable distribution.”

Otonomi says the solution is a fast and transparent automated delay-insurance product that “unlocks claims resolution in 45 minutes instead of 45 days, compressing administrative costs by up to 90%”.

The platform “supercharges operations” with algorithmic underwriting risk analytics and claim automation via smart contracts, the insurtech says.

This helps end-customers, shippers, logistics and freight forwarding firms, and is a “tremendous bottom-line saver for the insurance carriers,” CEO and Co-founder Yann Barbarroux says.

Nearly $US10 billion ($15.65 billion) of losses have been caused by supply chain disruption, he says, yet “the outlook for freight companies and insurers to get themselves out of their current trough remains bleak”.