Understory Inc. (Understory), a provider of insurance solutions for climate risk, and Skyward Specialty Insurance Group Inc. (Skyward Specialty), a specialty property and casualty (P&C) firm, have partnered to launch a new insurance solution.
The solution has been introduced to help US automotive dealerships control the rising cost and instability of dealership inventory coverage, or dealers open lot (DOL).
The new solution combines Understory's weather technology for risk mitigation with Skyward Specialty's underwriting, claims and captive experience to initiate a mutualised captive property insurance structure.
The programme is member-owned and controlled with competitive premiums and allows dealerships to make decisions to enhance their asset protection. Additionally, the programme's members share in underwriting profits, which standard insurance companies typically retain.
Understory's proprietary climate risk engine aims to price risk accurately and fairly while utilising unsurpassed forecasting capabilities. In addition, Understory's science-based insurance combines real-time underwriting, early weather warnings, loss mitigation support and automated weather claims processes to create a sustainable insurance product for all partners involved.
The programme, which launched on 1 September, 2022, already has its first members and potential members generated in partnership with a select group of specialty DOL brokers.
Alex Kubicek, co-founder and CEO of Understory, says: “To date, insurers have not addressed the growing threat of hail, which is the biggest risk within standard open lot coverage. Instead, they have asked dealerships to write bigger cheques for less coverage.
"Marrying our weather modelling 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."
Andrew Robinson, CEO at Skyward Specialty, adds: “The severity and unpredictability of hailstorms and other risks have driven the market to provide inadequate insurance solutions for dealerships. We are proud to partner with Understory to create an unmatched innovative risk solution to solve this challenge.”
