Descartes launches balance sheet insurer

Descartes Underwriting, the MGA focused on climate risk insurance products, has launched Descartes Insurance, a ‘full stack’ insurer licensed to underwrite risk by the French Regulator (ACPR).

Following a summer of exceptional drought, flooding and hail events across Europe, the new entity will be able to provide cover and fresh capacity to a wider range of clients, it said in a statement.

It follows the decision last month by Fidelis to split its business along similar lines, creating a new managing general underwriter (MGU), separate from the existing balance sheet insurance companies.

Descartes Insurance is backed by a panel of A-rated risk carriers, and is able to issue policies directly to mid-market clients in France, with plans to expand to other countries in the European Economic Area over the course of 2023.

It cites a “shortened value chain” and “increased flexibility” of the products and services it is able to offer as other reasons behind launching the balance sheet insurer.

Globally, for corporate clients and their existing portfolio, Descartes Underwriting will continue to operate as an MGA with its suite of parametric solutions.

Climate-driven solutions

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

“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.”

Sébastien Piguet, Descartes Underwriting’s chief underwriting officer, will serve as CEO of Descartes Insurance. In parallel, Kevin Dedieu, Descartes Underwriting’s chief R&D Officer, will take the role of deputy CEO of Descartes Insurance.

Piguet said, “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.”

Dedieu 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 revolutionise the entire insurance process, from risk assessment to claims payment.”

Joining Descartes Insurance as an Independent Board Member, Philippe Rocard, added: “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.”

Descartes chief operating officer, Violaine Raybaud, concluded: “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.”