Understory, a provider of insurance coverage for climate risk, and Skyward Specialty Insurance Group, a specialty property-casualty insurance provider, have partnered to launch a new insurance product to help UP automotive dealerships control the rising cost and instability of dealership inventory coverage, or dealers open lot (DOL).
“To date, insurers haven’t addressed the growing threat of hail, which is the biggest risk within standard open lot coverage,” said Alex Kubicek, co-founder and CEO of Understory. “Instead, they have asked dealerships to write bigger checks for less coverage.”
The new product combines Understory’s weather technology and risk mitigation expertise with Skyward Specialty’s underwriting, claims and captive experience to create a mutualized captive property insurance structure. The program is member-owned and controlled, with competitive premiums, the companies said. The program’s members have a share in underwriting profits, which standard insurance companies usually retain.
Understory’s proprietary climate risk engine aims to price risk accurately and fairly by utilizing its forecasting capabilities. The company’s science-based insurance combines real-time underwriting, early weather warnings, loss mitigation support and automated claims processes to create a sustainable insurance product.
“We’re thrilled to partner with Skyward Specialty to deliver this innovative solution,” Kubicek said. “Marrying our weather modeling and technology with their track record and expertise in P&C and captives solves dealerships’ ongoing struggle to find superior coverage in a market that continues to see increasing rates and volatility from standard DOL models.”
Skyward Specialty uses new types of risk data, advanced analytics, and emerging technologies to deepen its understanding of climate risks to properties, the companies said.
“The severity and unpredictability of hailstorms and other risks have driven the market to provide inadequate insurance solutions for dealerships,” said Andrew Robinson, CEO of Skyward Specialty. “We are proud to partner with Understory to create an unmatched, innovative risk solution to solve this challenge. Applying this level of data science to solve the climate challenges unique to this market and combining it with our highly specialized underwriting and claims talent will ultimately reinvent risk management and risk transfer for owners of automotive dealerships. Our partnership with Understory is another example of our strategy in action.”
The program, which launched Sept. 1, already has its first members and a pipeline of potential members generated in partnership with a select group of DOL brokers, the companies said. The program is backed by top reinsurers with an AM Best rating of A- or better.
