Adaptive Insurance, a new parametric insurtech platform powered by AI, has launched with the goal of transforming how businesses protect against climate risks. The company aims to offer immediate, technology-driven solutions for businesses affected by power outages, a widespread and costly issue.
GridProtect, the company’s flagship product, targets financial relief for businesses hit by power outages, which result in $150bn in annual losses.
In the US alone, power outages impact 15mn businesses each month, with financial losses ranging from $2,108 to over $8,000 depending on the outage duration, according to the Electric Power Research Institute (EPRI).
Investing in resilience measures can save businesses significant costs—$1 spent can save $13 in clean-up and economic expenses.
Adaptive Insurance emphasizes that these savings can be channeled into business growth, employee support, and community engagement.
Traditional insurance often leaves businesses exposed to losses due to coverage gaps. GridProtect aims to address these shortcomings by offering parametric coverage tailored for short-duration outages.
Using AI and climate data, GridProtect eliminates the typical 24-hour waiting period for coverage, ensuring immediate protection. This reduces financial disruption, giving businesses timely relief when power outages occur.
Climate change is outpacing the insurance industry, and businesses are bearing the brunt. GridProtect is designed to mitigate this by providing faster financial protection with less uncertainty.
Mike Gulla, CEO and Co-Founder of Adaptive Insurance
The rise in power grid failures underscores the importance of such solutions. Since 2000, 80% of the 1,755 major US power outages have been weather-related. According to FEMA, businesses that close for five days due to these events face a 90% chance of permanent closure. GridProtect aims to provide immediate capital to help businesses recover quickly and address both short- and long-term impacts of outages.
Adaptive Insurance is one of the first companies launched from Montauk Climate, a climate technology incubator. Philip Krim, Founder and Partner at Montauk Climate, highlights the urgency, noting that climate events cause $1bn in damage every three weeks in the US. Adaptive Insurance was created to tackle this growing problem with a scalable, effective solution.
Adaptive Insurance’s parametric insurance platform helps U.S. businesses build economic resilience against climate-related events and addresses the growing demand for policies that can cover gaps left by traditional insurance.
Starting with its power outage coverage, GridProtect, Adaptive uses the simplicity of parametric insurance – verified trigger events and agreed-upon payment amounts – to help create a financial safety net against unpredictable weather events that impact businesses.
by Peter Sonner
