By Isha Marathe

March 18 - (The Insurer) - Parametric startup Mythen recently began writing natural catastrophe risks through its flagship WindSpeed product and plans to offer similar solutions for hail, earthquake, wildfire and tornadoes to fill gaps left by traditional insurers, said founding CEO and president Sandra DeSilva.

Tech veteran DeSilva, who is based in Bermuda, told The Insurer that the process of building out Mythen and introducing parametric insurance to potential customers has been an exercise in education, with much of the nat cat market still unaware of how parametric cover can complement their primary insurance.

Mythen covers eight Southeast U.S. states "from Texas … down to Florida, all the way up to the Carolinas", DeSilva said.

"(These states) are very distressed, insurance carriers have decreased over the years, the rates have increased, the deductibles for wind speed coverage have increased, there are gaps in coverage, and we are there to fill those gaps," she said.

The company, which has launched a Texas MGA and a Bermudian collateralised reinsurer, offers a first-dollar loss with no deductible and covers up to $500,000 per covered location.

DeSilva said Mythen's coverage includes business interruption losses such as a flood due to a wind speed trigger.

"These are items that are typically excluded from their primary insurance coverage," she said. "(But) that fast cash is a real benefit to the (insured) in their relief."

She sees Mythen and other parametric solutions working "hand-in-hand" with primary insurers.

"(The primary insurer) can increase their deductible, they can fill us in and that becomes a win-win for the insured," she said.

Mythen's target customers include small to middle-market commercial properties, but "we don't discriminate", DeSilva said.

"You could have a property that is built in construction codes that are up to current code. Or you could have buildings that are a little more distressed, a little older, maybe the roofs are older, they're not getting the kind of insurance coverage from their primary insurer because of their building type (and) materials … (but) you are offered the same coverage."

DeSilva plans to expand Mythen's offerings nationwide across the U.S., and eventually into Europe and Asia.

"I think the challenge that we've had to overcome and will continue to overcome is the education of the product … this product has been in the market for quite some time," she added.

"There have been others who have tried to get into the space … it's about ensuring that we have the right structure, we have the right policy wordings, we have the right way to enter that will continue that education. So it's really about raising awareness."

AI'S ROLE IN MYTHEN

The startup operates through an AI-powered insurance platform that includes an MGU, claims service unit, its own collateralised reinsurer and quota share support from the wider market, and is fronted by Southlake Specialty, Parametric Insurer reported on Monday.

The algorithms that underpin its products are all proprietary to Mythen, and are built leveraging DeSilva's experience within the tech sector.

She served as CEO and chief software architect at Nova Limited for more than 18 years and as a senior adviser and independent non-executive director for various insurtechs for more than 10 years.

"We are heavy users of AI," she said. "It's not just for efficiency gains, it's also to allow us to be more innovative when it comes to risk selection and being a bit more strategic with it so we can actually be scalable in our offering."

The company combines traditional AI tech with newer generative AI offerings depending on the need, but its models are trained on wind data fed into it through third-party vendors to keep any illusion of bias out of pricing and coverage.

"We have primary and backup (vendors) that provide us that data, and that allows us to say (to our customers), 'We've sold you this policy based on this trigger,'" she said.

"We don't subscribe to the idea of … building out the calculation agent that decides what kind of wind speed is at the location and be the one selling (based on it)."

While the company is using traditional retail brokers as distribution channels for its product, DeSilva said the tech allows them to pinpoint ideal customers and spread "information and education" more efficiently.