Demex secures $500m+ capacity for working-layer aggregate SCS reinsurance solution

The Demex Group, a risk analytics and intelligence company that facilitates climate and catastrophe peril parametric stop-loss reinsurance protection, has secured over $500 million of capacity for its newly developed working-layer aggregate severe convective storm (SCS) reinsurance solution.

The 2025 storm season has got off to a fast-paced start for the re/insurance industry, and across the various forecasts that we’ve seen issued so far for this year’s season, the average projection calls for 16 named storms, 8 hurricanes, and 3 major hurricanes.

Moreover, insured losses from severe convective storms (SCS) in the United States reached $54 billion in 2024, significantly exceeding the annual average of $33 billion since 2015. This figure represents a 90% increase compared to the previous decade, as reported by broker Aon.

Today, Demex Group has announced that it has developed a reinsurance solution that is already paying dividends for insurers. By working with five of the world’s leading reinsurance brokers, the company has managed to arrange protection for over $75 million of limit in 2025, with far more in available capacity.

In contrast to the predictive catastrophe models that are commonly used to evaluate hurricane and other distant risks, Demex’s solution reportedly adopts an experiential modeling methodology that utilises a modeled loss index specific to insurers.

Demex stated that the performance of its model up to May 2025 shows a strong correlation between the frequency and severity of SCS events recorded thus far and the total losses incurred, with the areas of greatest exposure already resulting in reinsurance recoveries for certain clients.

One client example is Innovated Holdings Inc., which worked alongside reinsurance broker Acrisure Re, to purchase the Demex solution. According to Demex, Innovated Holdings has already had payouts triggered for its 2025 reinsurance program.

For those unaware, Innovated Holdings is a regional carrier, whose brands CFM Insurance and Forreston Mutual Insurance Company operate in areas that see frequent storm activity in the Midwest United States.

Jake Black, CEO of Innovated Holdings Inc, commented: “Innovated Holdings’ member companies provide insurance across many areas prone to severe convective storms. We use a variety of different measures to minimize our financial risk from storm losses. Being able to access Demex’s innovative reinsurance solution using trusted reinsurance brokers and capacity partners is an important part of these measures.”

“The policy triggers are clear and easy to understand. The storm season so far in 2025 has meant we are already receiving a claim payment. I would encourage all insurers with an exposure to severe convective storm losses to evaluate this new SCS reinsurance solution,” Black added.

Jim Botsis, Head of the Chicago Office at Acrisure Re and reinsurance broker to Innovated Holdings, said: “At Acrisure Re, we take pride in our deep understanding of the full range of reinsurance solutions available to support our clients. Reinsurance plays a vital role in enhancing an insurer’s financial resilience. That’s why we were particularly pleased to introduce Demex’s Retained Climate Risk Reinsurance solution for the first time this year. Severe convective storms often expose insurers to significant losses, and the demand for innovative, forward-looking solutions like this continues to rise.”

Demex Chief Risk Officer Matt Coleman, added: “The capacity transacted with Demex so far is just the tip of the iceberg. Our current discussions indicate there is already more than $500 million of capacity available from reinsurers for carriers wishing to secure financial protection for 2026.”

Coleman continued: “Thus far we have accumulated over $30 billion in ground-up claims data informing our model, and Demex analysts have identified that a minimum of 15% of storm losses are not captured by the traditional industry data providers. Some may miss as much as 50%, making accurate risk pricing extremely challenging for both primary carriers and reinsurers. That’s why our use of first-hand claims information directly from the carrier is so fundamental to developing a solution that reinsurers are happy to back with affordable capacity. Ultimately, the solution offers them an attractive risk-adjusted return on capital.”

Coleman concluded: “This is genuinely new reinsurance capacity from A-rated providers for insurance carriers, many of whom are facing an existential threat from accumulated SCS losses. As we look forward to the 2026 risk year, we’re already seeing even more engagement from reinsurance brokerage firms, increased interest from carriers and an expanding reinsurance capacity network.”