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Today's interview is with Nakita Devlin, CEO & Founder of Ric Insurance.
What Is Ric?
What is Ric, and can you share more about your mission?
Nakita Devlin - Ric is an extreme weather-focused MGA that specializes in creating micro parametric insurance products. With parametric insurance, policyholders receive a set payout when a specific event occurs, rather than being reimbursed for their losses.
Our mission is to help policyholders quickly recover from extreme weather and catastrophe risks by disbursing a $10,000 payout when specific metrics have been met. We’ve seen the devastating impacts natural disasters have on consumers, and the risks are only growing. Our goal is to create products that ease the recovery process and help policyholders quickly get back on their feet.
Flood Protection Model
Can you walk us through the unique features of Ric's flood protection model and how it differs from traditional insurance solutions?
Nakita Devlin - Traditional insurance solutions mainly focus on long-term recovery – replacing lost assets, rebuilding, and resilience planning. At Ric, we’re focused on the short-term needs of policyholders after a disaster. This includes providing the financial means to pay for interim housing, unexpected medical expenses, or whatever people need to hold them over until their traditional insurance payouts come through for clean-up and repairs. Unlike a traditional policy, there are no guidelines or restrictions about how this payout must be utilized; the model gives policyholders the flexibility to use the money where they need it most.
At Ric, we proactively reach out to our customers when their policy has been activated to verify that they’ve experienced a loss. Once they confirm, there’s no need to file a claim or wait for an insurance adjuster – policyholders will automatically receive a payout within 28 hours. So, there’s significantly less red tape compared to traditional insurance.
The fact that Ric’s premiums are under $20 a month means the payouts are relatively modest. This is not intended to be an all-encompassing solution. Ric products are meant to augment a traditional insurance model with flexible and affordable micro parametric products, creating a more comprehensive recovery plan that infuses capital into communities after a disaster as occurred. Since our policy kicks in after a certain threshold of risk has been met, such as a certain amount of flood water, it eliminates any sort of uncertainty about whether policyholders will receive a payout and decreases payout distribution time.
Rainfall Metric
Why is Ric using rainfall as the policy activation metric? Why not another metric?
Nakita Devlin - Currently, there’s over 300 years of rainfall data publicly available. We use that large amount of information to improve the accuracy of our proprietary modelling. Rainfall amounts are one of the less variable and most consistently tracked metrics collected in relation to storms, making this the best benchmark to base our policy trigger on.
Market Development
As you are in the early stages of signing your first customers and partnering with reinsurance companies, how do you see this market developing, and what opportunities do you think it offers for others to participate in its growth?
Nakita Devlin - Extreme weather is one of the biggest threats to our communities and economies. It’s likely that the market will continue to expand to account for that. The recent hurricanes in the southeast and the California wildfires are prime examples of the frequent devastation policyholders are experiencing amid worsening weather patterns. As a result, consumers are looking for reliable solutions that will protect them if a disaster strikes.
One of the opportunities we see is for this kind of catastrophe insurance product is to incorporate it into employee benefit packages. Offering insurance as an employee benefit is not a new concept; we already see it in life and health insurance. Extreme weather solutions are a cost-effective offering because they enable employers to address the need for protection after a natural catastrophe. By incorporating catastrophe insurance into an employee benefits plan, employers can demonstrate their commitment to their employees and help them return to normalcy faster after an extreme weather event, reducing potential organizational downtime and employees’ out-of-pocket costs.
Many organizations already think about business continuity planning and have emergency response strategies in place – especially after the pandemic, which forced organizations to consider how they might respond in case something similar happens. An extreme weather insurance policy, like Ric’s, is something organizations could consider as an essential enhancement to their natural catastrophe strategies. By providing this option to their employees, they’re not just offering needed support, they’re also adding an additional level of protection for the organization after a catastrophe and enabling employees to return to work faster.
Climate Pattern Response
Given the increasing frequency of extreme weather events, how does Ric ensure that its services stay relevant and responsive to changing climate patterns?
Nakita Devlin - Ric’s ultimate goal is to create a marketplace of insurance products that address multiple extreme weather concerns. We recognize that consumers aren’t just experiencing one catastrophe in isolation but often a suite of risks that are interconnected. As we’ve seen after the California wildfires, when there’s extreme heat, wildfires, or droughts, extreme rainfall follows.
As extreme weather patterns evolve, we want to help policyholders retain some sort of control over how disasters impact their lives. Having a suite of products that respond to the constantly changing, and worsening, catastrophes and consumer needs is an essential part of that.
Financial Impacts
How does Ric help individuals and businesses plan ahead to protect against the financial impacts of extreme weather events?
Nakita Devlin - Our micro-parametric products protect policyholders against the financial impacts of extreme weather events by immediately infusing capital into communities after pre-defined metrics are met. The way traditional insurance is set up makes it difficult for policyholders to plan ahead. They aren’t sure when they’re going to receive their disbursement, and the final amount is still unknown until it hits their accounts. This is where parametric insurance products can help.
Smaller premiums mean the product is more affordable, and the specific trigger points and payouts for each product eliminates the concern of when funds will disburse and how much, giving policyholders the opportunity and financial freedom to plan for the short-term immediately after an incident.
Flood Risk Misconceptions
What are some of the most common misconceptions about flood risk, and how does Ric’s approach educate the public?
Nakita Devlin - One of the most common misconceptions about flood risk is that it’s included in the average homeowner’s policy. As a result, it’s estimated that only 4% of homeowners nationwide have flood insurance, even though 90% of disasters in the U.S. involve flooding.
To address this issue, Ric is working with employers in communities to educate large bases of renters and homeowners about their flood risk exposure.
How do you ensure that your solutions are scalable and adaptable for regions that have varying levels of exposure to flooding risk?
Our micro-parametric solutions are designed to be customized to meet each communities’ individual needs. No two communities are the same, and their insurance products shouldn’t be the same either. What may be normal rainfall for one community could mean a flood event for another. Further, what could be enough short-term funds for one municipality could be too little for another, depending on the cost of living in the area.
Our baseline policy offers $10,000 payout to our policyholders, but the trigger point and amount can be customized to match each community’s needs.
Community Involvement
How does Ric envision its role in helping communities rebuild and recover after a disaster, and what does the recovery process look like in practice?
Nakita Devlin - Our goal is to ease policyholders’ financial burden, so they can focus on quickly returning to a sense of normalcy. Ric’s role in the recovery practice is to provide easily accessible short-term capital that consumers can use to address their immediate needs, whether it be paying for cleanup costs or setting up a temporary base of operations.
Post-disaster recovery isn’t as easy as it may sound. There are several communities that are still reeling from the impacts of recent major natural disaster events, and it can take a while for traditional insurance companies to disburse funds to their policyholders because of the drawn-out claims process that typically involves mountains of paperwork and a visit from a claims adjuster. By providing no-strings-attached funds, Ric helps to ease the stress policyholders typically experience after an incident and gives them the financial means to start rebuilding their lives immediately.
Into The Future
Looking ahead, what critical challenges will the adaptation sector need to address?
Nakita Devlin - The biggest challenge in the U.S. will be continuing to move the private sector in the right direction.
With the current presidential administration expressing interest in reducing FEMA and pushing for the private market to create more solutions for consumers, it’s likely that the number of federally declared disasters may diminish, thus reducing the federal funding that’s available and distributed.
The adaptation community has always collaborated with the private sector to create solutions that address the growing extreme weather needs, but that work will be more important over the next few years. The private sector will need to be more proactive in the face of extreme weather mitigation and adaptation.
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