January 16, 2021 Alumni

Raincoat takes the hassle out of natural disaster insurance

Raincoat

Raincoat is turning the generally difficult and stressful natural disaster insurance process into a simple and hassle-free system with a product that is unlike any other in Puerto Rico.

The problem

Natural disasters not only put millions of lives at risk each year but also financially devastate families, businesses, cities and entire regions. In the Caribbean, hurricanes often have catastrophic economic effects from which it can be extremely difficult to recover.

Natural disaster insurance is typically included in standard homeowners and business interruption policies, but these usually focus only on property damage, take years to process, involve numerous exclusions and rarely cover what policy holders need most. Many never pay.

The solution

Raincoat has come up with an insurance product that pays within days of a natural disaster without having to file a claim.

Instead of relying on an adjustment process, which can take years and result in zero payout, Raincoat applies advanced weather modeling to pay instantly based on modeled losses. The end result is simple, transparent, reliable natural disaster insurance for home, business and potential income loss with no adjusters, no deductibles and no unpleasant surprises.

How it works

  1. Customers register a policy online and provide a physical address.
  2. Raincoat monitors that location using advanced technologies.
  3. Raincoat issues a payout within days of an event.

Raincoat

Target market and competition

Raincoat is targeting the B2C (business-to-consumer) and B2B2C (business-to-business-to-consumer) markets.

  • Under the B2C model, Raincoat sells insurance directly to consumers, digitally or through partnered channels, and collects 20 percent of the premiums while re-insuring close to 100 percent of the risk.
  • Under the B2B2C model, Raincoats partners with established insurance companies to offer a white-labeled solution and collect a percentage of the premium or a flat monthly SaaS (software as a service) fee from the partner company.

Raincoat has been attracting independent contractors and small- to medium-sized businesses that use the policy to cover potential loss of income due to natural disasters and serve as a guaranteed lifeline for recovery.

California-based Jumpstart and Florida-based StormPeace offer similar insurance policies for earthquake and hurricanes, respectively. However, Raincoat is unique in that it has its own software stack (pricing, triggering, policy engine) with a software-heavy founding team.

The challenge of expansion

Raincoat's greatest challenge has been how to expand into new markets and distribute its product globally. To smarten and energize its expansion plans, the company sought the help and guidance of Bravo Family Foundation's Rising Entrepreneurs Program.

Raincoat

Rising Entrepreneurs Program Experience

The Raincoat team greatly benefited from the training, mentoring, network opportunities and other resources provided by the Rising Entrepreneurs program. In particular, it learned these critical lessons:

  • How to evaluate diverse business models, especially those that can generate a profit from day one.
  • How to understand and use metrics to predict long-term success.
  • How to cultivate a global mindset and focus on scalable growth.

These lessons helped Raincoat improve its product and further define its business model and the future direction of the company.

"Bravo's program has a unique knowledge of the entrepreneurship eco-system in Puerto Rico and a network that is hard to match"

Raincoat CEO, UX designer and full-stack developer, Jonathan González

Raincoat's team consists of internationally recognized scientists, engineers and insurance experts with substantial experience in software development, weather modeling and parametric risk-transfer products.

"We can't imagine ourselves doing anything other than entrepreneurship," González said. "We believe that the problem we're trying to solve is worth solving."