Arbol Raises $60 Million in Series B Funding to Scale Parametric Insurance, responding to Increasing Climate Risk

The Series B funding bolsters Arbol's ability to tackle the record-breaking number of climate-related insured losses

NEW YORK, April 30, 2024 /PRNewswire/ -- Arbol, a leading climate risk solutions provider operating in over 15 countries, announced today that it has closed a $60 million Series B funding round, co-led by Giant Ventures and Opera Tech Ventures with participation from Mubadala Capital.

In the wake of a year marked by unprecedented climate events, with 398 natural disasters causing $380 billion in losses and a record 37, billion-dollar insured loss events, Arbol's funding represents a long overdue moment for climate risk insurance. Parametric insurance delivers payouts based on predefined and trusted climate data triggers, such as rainfall amounts or temperature thresholds. Objective data triggers replace the subjective and time-consuming manual damage assessments conducted by claims adjusters, enabling quicker delivery of urgent financial relief to communities following catastrophic climate events. For example, if rainfall falls below a certain level, adversely affecting crop yields, farmers could receive rapid financial support when facing reduced production due to specific weather conditions.

Arbol brings scale, transparency, and efficiency to climate risk management. Through leveraging global, trusted datasets for objective loss triggers, Arbol aims to broaden the adoption of parametric products and pioneer the concept of climate risk as a tangible, investable asset class. It differentiates itself through its technology ecosystem, which combines automated structuring, AI-powered underwriting, pricing tools, and user-friendly platforms for agents and brokers. Combining this approach with flexible risk capital enables Arbol to underwrite bespoke solutions, facilitating the scalable distribution of innovative financial products.

"This Series B funding marks a pivotal moment for Arbol, affirming our achievements and propelling our mission forward to normalize parametric financial products and insurance globally as key strategies in climate risk management," said Sid Jha, Arbol's founder and CEO. "Our ambition extends from empowering the world's smallest subsistence farmers in underserved regions to securing the assets of the world's largest corporations, ensuring they all have access to unmatched protection amidst the unpredictability of climate change. Our approach is not just about offering insurance; it's about creating a safety net that spans the entire spectrum of economic participants affected by climate volatility."

The fresh funding will support Arbol's continued expansion into agriculture and renewable energy through products tailored for new perils and geographies. The capital raised will also support Arbol's global expansion and broaden its investment in property and casualty (P&C) and home insurance business lines in the U.S. and internationally. Arbol will continue to deepen its work with entities in the financial sector, such as banks, which are facing new challenges with climate risks, both for their internal risks and client needs.

"You can't go a week without reading an article about extreme weather events occurring and the challenge this poses for traditional insurers," said Cameron McLain, Co-founder and Managing Partner of Giant Ventures. "Arbol's pioneering approach enables businesses, large and small, to manage climate risk where traditional insurance fails. Their achievements are hugely impressive, and we believe they're building an essential pillar of climate adaptation and the global financial infrastructure."

"While climate change is more and more tangible, the need for hedging solutions that are scalable and economically sustainable is becoming key," added Thibaut Schlaeppi, Managing Director of Opera Tech Ventures. "Leveraging insurance and capital markets offers Arbol's clients a pivotal solution to build the financial resilience they need".

Arbol raised a $7 million Series A funding round in January 2021 led by a member of The Susquehanna International Group of Companies (SIG) with participation from Mubadala Capital and Space Capital.

The company transacted $250 million in gross written premium (GWP) in 2023, with significant growth in its renewable energy and reinsurance businesses. Arbol Insurance Services (AIS), a wholly owned subsidiary of Arbol, became an approved Lloyd's of London cover holder in May last year. Arbol recently announced the launch of Lilypad Insurance, a newly established carrier dedicated to serving the unique insurance needs of homeowners and property investors in coastal areas. Lilypad received its certificate of authority from Louisiana and has begun operations in the state. Subsequently, it announced the acquisition of Centauri Specialty Insurance Company and Centauri National Insurance Company, subject to regulatory approval. Lilypad Insurance will enable Arbol to grow the total addressable market of parametric insurance through hybrid product distribution while addressing the urgent need to address the growing coverage gap in coastal communities.

Arbol's success stories span globally — over 15 countries — and include a wide range of businesses looking to build resilience against climate risk. This Series B funding is a testament to Arbol's vision, its team's execution capability, and the significant market demand for innovative risk management solutions.

About Arbol

Arbol is redefining climate risk management to transform it into a globally recognized asset class. Through a foundation of innovative pricing, comprehensive data infrastructure, and precise AI-powered underwriting tools, Arbol aims to bridge the global coverage gap and offer practical solutions for managing climate risks. Awarded for its underwriting innovation, Arbol leverages advanced technologies to serve a broad client base, emphasizing sustainability and resilience in an unpredictable climate landscape.

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