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SA deep science startup calculates climate catastrophe risk

Business

Lot Fourteen startup Reask is using machine learning to help insurance companies understand the risks posed by climate change, and how to price it.

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Reask co-founder Nick Hassam is speaking at InsurTech Connect Asia in Singapore this week as part of an AusTrade delegation to explain how the company uses data, technology and high-performance computing for climate catastrophe risk modelling.

His return to Asia is poignant, since the last time he visited was five years ago for the 15th Conference on Catastrophe Insurance in Asia in Taipei where he met climate scientist Thomas Loridan and the idea for their climate tech startup was hatched.

Since then, the team at Reask has been busy solving the global issue that reinsurance firms are having with accessing globally consistent risk metrics for understanding catastrophic climate phenomena.

“We basically help insurance organisations to understand, quantify and subsequently mitigate that risk by building models to understand that risk and how it is they should price that risk,” Hassam said from his base at Lot Fourteen in Adelaide.

“There was an existing demand, but that demand wasn’t really being met with novel or modern technologies and all of it was using backward-looking statistical methods.

“Whereas, there are new and modern methodologies such as broader AI and machine learning that bring a lot more to the game and so we were bringing a new way of looking at things and novel ways of addressing these particular challenges.”

After launching in 2018, Hassam said the startup faced a few challenges, namely building a reputation and broader capital raising.

“Because we are a very deep science organisation, there’s a very significant hurdle for organisations to overcome to actually accept our view of risk to help them guide and make decisions,” Hassam said.

“They could be making very big decisions based on the type of information we are providing to them, you know billions of dollars is being spent in the industries we work in, so we need a lot of trust and faith in our products.”

Now, their key backer, TenCent – the global behemoth which owns one of the world’s biggest social media platforms WeChat – is funding the startup’s expansion as the team grows across Australia, the United Kingdom and Switzerland.

With this backing and an increase in demand for their work, Hassam is hoping to expand the workforce from four to about 15 workers by the end of the year.

About 95 per cent of Reask’s work is done outside of Australia, including across Europe, Singapore and the United States. Hassam says their target market is “large multi-national insurance and reinsurance companies”.

“In Australia, we have a smaller number of these larger, multi-national organisations. There are some, and we do work with some of those, but for us to address the challenges we are looking at on a global scale, most of our target market is in places like Europe,” Hassam said.

“One of our clients is a company called Axa who are in the top three largest insurance companies in the world and are based out of Paris, and we have developed strong relationships with them and the type of work that we are doing.”

Hassam said the company moved into the Stone & Chalk startup hub in Lot Fourteen two years ago after searching for an “innovation space that enables that transmission of ideas and support”.

“We have discovered through the startup process that it really is a process that involves the generation of ideas and forming an environment that enables that generation of ideas,” he said.

“What we see at Lot Fourteen, and within the innovation workspace, we see that ability to support those ideas and I guess the capabilities they have to provide people with what they require to develop their startups.”

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