Demex

Demex Group is a pioneering company in the insurance and reinsurance industry, focusing on managing financial risks associated with non-catastrophic, high-frequency weather events. Unlike traditional insurance that primarily covers catastrophic events like hurricanes, Demex addresses the financial impact of less severe but more frequent weather events such as heat waves, droughts, and storms. These events are becoming increasingly common due to climate change, occurring five times more frequently than in the 1980s.

Demex serves a diverse range of clients, including insurers and corporate entities, who are looking to mitigate the financial risks posed by these frequent weather events. The company operates in the climate risk management market, providing innovative solutions that supplement traditional reinsurance programs. This helps insurers minimize underwriting losses and protect their balance sheets.

The business model of Demex revolves around its unique products like Retained Climate Risk Reinsurance (RCR) and Operational Climate Risk Coverage (OCR). RCR is a groundbreaking layer of protection that covers the risks of non-catastrophic weather events within the retention layer, which are not typically covered by traditional reinsurance. OCR, on the other hand, addresses the operational risks and unexpected costs arising from extreme weather conditions like heavy rainfall, snowfall, and extreme temperatures.

Demex makes money by offering these specialized reinsurance products to insurers and corporates. They use customer data to quantify and transfer unique financial risks, designing bespoke parametric reinsurance solutions. These solutions are tailored to proxy claims related to specific weather events, thereby providing a financial safety net for their clients. For instance, in 2022, Demex helped an insurance carrier manage losses from severe convective storms by transferring $50 million in risk to a trusted reinsurance partner, thereby preventing a credit rating downgrade.

Keywords: climate risk, reinsurance, non-catastrophic, weather events, insurers, corporate clients, financial protection, parametric reinsurance, climate change, risk management.