Centinel covers higher risks with parametric insurance

centinel group pic

Standard P&C insurance often has exclusions for certain events. In 2019, Soton Rosanwo, founder and CEO of Centinel Insurance, an early-stage insurtech startup, first noticed the need for parametric insurance to cover such events.

Soton Rosanwo, Founder and CEO, Centinel Insurance

“Many of the risks that we commonly and increasingly face every day are very difficult to insure using standard insurance, especially P&C approaches to cover risk,” he said. “Insurance often comes with opaque exclusions. You go to file a claim and suddenly realize you’re not covered. We want to bring transparency.”

Rosanwo saw a way to leverage data and decentralized technology to hedge what would normally be hard-to-insure risks. His previous experience includes management consulting at Bain & Company and product strategy management at Allstate. In 2020, while at Allstate, she surveyed 400 people and found that 70% lacked coverage for hard-to-insure risks and would be willing to pay an amount that would make it viable.

Earlier this year, Rosanwo began assembling a team and building a prototype for Centinel, deciding to cover four types of events: utility outages, weather-related events, infectious diseases, and event cancellations. Centinel intends to automate claims so that when one of these events occurs, payment for your policies will be issued.

“For utility outages, the triggers we look at are things like the location, the length of the outage, the underlying service provider, the propagation of the outage itself, and how many homes are affected,” Rosanwo said. “Your insurance interest will be in your location and your property within that location.”

As Centinel works to complete build of its product by Q2 2023 and launch a pilot by Q3, it has gained support from Northwestern Mutual’s Black Founder Accelerator, announced in September. This program funds black entrepreneur start-ups with $100,000 plus support in the form of coaching, business training programs, and introduction to venture capital firms.

“A lot of people talk about how entrepreneurship is a very lonely journey,” Rosanwo said. “One of the great benefits of the accelerator was seeing others go through the same thing at the same time. You start to realize that there is a lot of commonality in the challenges we face. Which has really been instrumental in helping accelerate the progress of Centinel is the mentorship it has provided as well as the networking opportunities.”

One such opportunity for Centinel was launching on the demo stage at InsurTech Connect in Las Vegas in September. “Reinsurers approached me saying they heard the pitch, they heard this idea and they’re really interested in this space, in the parametrics,” he said. “Those are the kinds of conversations I knew I needed to have, but I didn’t necessarily know how to get to the door.”

Centinel is looking for reinsurers to support its model. “To provide this risk coverage, we need to do it in partnership with reinsurers and insurers that would operate as capacity providers,” Rosanwo said. The product will serve both individuals and small businesses in its first phase, she added, and will be rolled out to commercial customers and larger companies in a second phase, along with licensing its technology.

“The claims process can be a huge inconvenience, not just for the policyholder, but also for the insurer,” Rosanwo said. “With Hurricane Ian, both policyholders and insurers were saying, ‘We don’t even know how we’re going to get through the sheer volume of claims.’ We really want to be able to provide that peace of mind when insurance isn’t enough.”