Parametrix Insurance Secures $17.5M for Cloud Downtime Coverage

Parametrix Secures $17.5 Million to Insure Against Cloud Downtime

The insurtech sector is experiencing significant growth, yet Parametrix believes substantial innovation opportunities remain. The company recently announced the completion of a $17.5 million funding round.

Addressing a Critical Business Risk

Parametrix provides insurance solutions for businesses dependent on third-party cloud providers, e-commerce platforms, payment gateways, and CRM systems.

Downtime experienced with these essential services can result in substantial revenue losses for companies, despite being beyond their direct control. Parametrix aims to mitigate this previously uninsurable risk.

A Two-Pronged Approach to Downtime Insurance

Parametrix tackles this challenge through two primary methods.

Firstly, the company has created a system for continuous, global monitoring of third-party IT services. This provides real-time visibility into service interruptions, measured in milliseconds.

The system also recognizes the interconnectedness of many services, factoring this into its precise monitoring capabilities.

Secondly, Parametrix employs a unique pricing model. It leverages extensive data to help clients assess the financial implications of downtime.

Customers can then tailor their payout rate per hour of downtime, with the premium calculated accordingly.

The Inevitability of Downtime and a Technological Solution

“We’ve all experienced the negative effects of downtime,” stated Neta Rozy, co-founder and CTO. “When infrastructure components fail, businesses are impacted.

Typically, technological issues are addressed with further technology. However, downtime is unavoidable, regardless of infrastructure quality or platform redundancy, often resulting in direct financial losses.”

Parametric Insurance for Immediate Compensation

This combination of monitoring and pricing distinguishes Parametrix from traditional insurance offerings. The company’s name reflects its use of a parametric model.

When an insured event occurs, customers receive immediate compensation without a claims process or the need to demonstrate loss.

Partnerships with Established Carriers

Parametrix functions as an intermediary, collaborating with existing insurance carriers to handle customer payouts. This is particularly important given the potential for widespread impact during significant downtime events.