Understory
Understory is an insurance technology company that uses a proprietary network of ground-based Dot weather sensors and machine learning to underwrite severe weather risk insurance for franchise auto dealerships, agricultural operations, and renewable energy infrastructure.
- Company typePrivate
- Founded2012
- HeadquartersMadison, United States
- Headcount11–50
- GTM typeB2B
- OfferingServices
What Understory does
Understory is an insurance technology company that combines proprietary ground-based weather sensor hardware with machine learning to underwrite and price severe weather risk. Founded in 2012 and headquartered in Madison, Wisconsin, the company operates a Dot weather sensor network that captures 125,000 hyperlocal weather measurements per second across three continents, feeding a Hyperlocal Climate Risk Engine that produces a 1x1km global climate risk and catastrophe model augmented with 50+ years of historical data. The core platform, UnderstoryOS, rebuilds the broker and customer journey with broker management, pricing/quoting, claims management, and real-time risk-adjusted underwriting modules, supporting automated loss detection that triggers payouts without traditional claims processing.
The company's flagship commercial product is Dealers Open Lot insurance for franchise auto dealerships, structured as a member-owned group captive administered by Marsh Captive Solutions with policy issuance through Skyward Specialty Insurance Group and capacity from four of the world's top ten reinsurers. Members must commit a minimum $100,000 in premium, participate in annual board meetings, and become equity stakeholders in the captive. Understory also serves the agriculture vertical (recognized as AgTech Insurance Solution of the Year in 2020) and, as of mid-2024, is expanding into renewable energy risk management.
Revenue is generated primarily through insurance premiums on a custom, quote-based annual subscription, with the captive structure allowing members to retain premium profits and investment income. Understory does not retain underwriting risk on the carrier paper; its revenue is best understood as MGA-style fees, platform fees, and potential licensing of the Hyperlocal Climate Risk Engine and Dot technology. The company employs approximately 25 staff across North America and Europe and has raised approximately $24.5 million cumulatively, including a $15 million Series A in June 2024 led by True Ventures and Prelude Ventures.
Understory firmographics
Firmographics- Name
- Understory
- Legal name
- Understory, Inc.
- Website
- https://understoryweather.com
- Company type
- Private
- Founded year
- 2012
- Operating status
- Operating
- Headcount range
- 11–50 employees
- Short description
- Understory is an insurance technology company that uses a proprietary network of ground-based Dot weather sensors and machine learning to underwrite severe weather risk insurance for franchise auto dealerships, agricultural operations, and renewable energy infrastructure.
- Ownership category
- akta.pro rank
Understory industry classification
Industry- Product category
- Climate Risk Insurance
- NAICS
- Direct Insurance (except Life, Health, and Medical) Carriers (52412), Insurance Carriers (5241)
- SIC
- Insurance Carriers, Nec (6399), Fire, Marine & Casualty Insurance (6331)
- akta.pro primary industry
- Insurance Underwriting, Pricing & Accumulation Tools (P&C, Specialty, Parametric) (EUABALAF)
- akta.pro secondary industries
- Risk Scoring, Hazard & Geospatial Analytics (FSAOAIAE), Data Management & Enrichment for Underwriting (incl. third‑party data) (FSAOAIAJ), Early Warning, Event Monitoring & Forecasting (Extreme Weather Alerts, Nowcasting) (EUABALAJ), Underwriting Decision Support & Rules Engines (FSAOAIAD)
Keywords
Where Understory is headquartered
LocationHeadquarters
- HQ city
- Madison
- HQ country
- United States
- HQ region
- North America
Offices1 record
Markets served
Understory business model
Business model- GTM type
- B2B
- Offering type
- Services
- Cost components
- Technology or R&D, Personnel, Operations, Marketing or Sales, Supply Chain, Others
Revenue model
- Insurance Premiums: Understory generates revenue through insurance product premiums. Their proprietary weather risk model enables accurate assessment and pricing of severe weather risks, allowing the company to provide coverage where traditional insurers cannot. The company offers specialized products for dealership inventory (Dealers Open Lot) and is expanding into renewable energy sector.
- Weather Risk Technology Licensing: The company leverages its weather risk technology for expansion into new sectors including renewable energy, potentially licensing its hyperlocal climate risk engine and Dot sensor technology to partners.
Pricing tiers
| Model | Billing | Price |
|---|---|---|
| Subscription | Annual | Custom quote-based pricing |
| Subscription | Annual | Dealers Open Lot Program - Member-owned insurance |
Go-to-market motion2 records
Distribution channels3 records
Marketing channels3 records
Understory product offering
Product offeringCore offering
Understory is an insurance and climate risk technology company that combines its proprietary Dot™ weather sensor network with a machine-learning-driven Hyperlocal Climate Risk Engine to underwrite and price severe weather risk. It sells specialty insurance products — most notably Dealers Open Lot coverage for franchise auto dealerships and broader climate-risk solutions for agriculture and renewable energy — with automated loss detection and trigger-based payouts enabled by real-time ground-truth weather data.
Product overview
Understory offers a unified digital insurance platform built for the era of climate risk, centered on its Hyperlocal Climate Risk Engine. The platform integrates the proprietary Dot™ weather sensor hardware (capturing 125,000 hyperlocal measurements per second) with the UnderstoryOS software platform that provides broker management, pricing and quoting, and claims management capabilities. Insurance products include Dealers Open Lot insurance for automotive dealerships and broader climate risk solutions for vulnerable industries. The system uses machine learning to match weather events with damage and enables automatic claim payouts when severe weather is detected.
Differentiator
Problem solved
Functional benefit
Brands
- Dot: Ground-truth weather sensor technology that captures 125,000 weather metrics per second, solar-powered and maintenance-free.
- UnderstoryOS
- Dealers Open Lot
Products and services
- UnderstoryOS Digital insurance platform for enterprise insurers, reinsurers, and brokers offering broker management, pricing and quoting, claims management, and real-time risk-adjusted underwriting powered by Understory's Hyperlocal Climate Risk Engine.
- Hyperlocal Climate Risk Engine Machine-learning-powered climate risk and catastrophe modeling platform combining 5+ years of Dot sensor ground-truth data with 50+ years of historical data to produce 1x1km global risk assessments for severe weather. Used to underwrite and price climate risk across Understory's insurance products and available to enterprise insurers and reinsurers.
- Dot™ Weather Sensor Proprietary solar-powered, maintenance-free, tamper-resistant ground-truth weather sensor capturing 125,000 hyperlocal weather measurements per second (hail size/force/angle, windspeed, rainfall, temperature, atmospheric pressure, humidity, solar radiation, growing degree units, evapotranspiration) with 99% up-time and cellular connectivity, deployed across 3 continents.
- Dealers Open Lot Insurance Member-owned independent insurance program for franchise auto dealership groups covering collision, comprehensive, false pretense, windstorm, hail, flood, earthquake, and certified acts of terrorism on open-lot vehicle inventory. Includes 24/7 weather forecasting and alerts, automated claims triggered by severe weather events, flexible deductibles, and member participation in premium profits. Requires $100,000 minimum premium and annual board participation.
- Climate Risk Insurance Solutions Insurance products for climate-vulnerable industries (agriculture, automotive, and renewable energy) featuring hyperlocal risk assessment, automated loss detection, and fast trigger-based payouts without traditional claims processes, built on the Hyperlocal Climate Risk Engine.
- Hail Insurance for Automotive Dealers Hail-specific severe weather insurance for automotive dealers, leveraging Dot sensor data and automated claims to protect open-lot vehicle inventory from hail damage, expanded geographically across the U.S. in 2020.
Quantifiable outcome
- Since 2005, the vast majority of economic losses caused by severe weather were uninsured - Understory closes this climate coverage gap
- +2 more outcomes
Companies that use Understory
Customer profileNamed customers3 records
Segments3 records
Ideal customer profiles3 records
Understory technology and API
TechnologyTechnology focussed Yes
API detail
- Has API
- No
- API docs
- API detail
Core technology
AI maturity
App detail
AI capability4 records
Feature5 records
Understory partnerships and signals
Strategic signalPartnerships
Four partnerships are on record, tiered core, major and minor.
- Skyward Specialty Insurance GroupcoreSkyward Specialty Insurance Group (rated A- by A.M. Best, nearly $1 billion in gross written premium) provides policy issuance for the Dealers Open Lot insurance program. They are the licensed insurance carrier providing coverage to membership.
- Marsh Captive SolutionscoreMarsh Captive Solutions is the world's largest captive manager with 1,500+ captives under management and $68 billion in premiums. They administer the member-owned independent insurance company (group captive) for Understory's Dealers Open Lot program.
- McLarens Claims ManagementmajorMcLarens Claims Management provides claims administration for Understory's Dealers Open Lot program, with oversight from Member Claims Committee.
- KPMGminorKPMG serves as the auditor for Understory's Dealers Open Lot insurance program, providing financial oversight and compliance verification.
Scale indicators11 records
Recent moves6 records
Expansion highlights6 records
Understory competitors and assessment
Company assessmentDirect peers
- Arbol: Arbol is a parametric insurance platform that uses weather and climate data to price and trigger payouts for weather-sensitive risks. Directly comparable to Understory's automated, weather-triggered insurance model and target segments (agriculture, energy, supply chain).
- Descartes Underwriting: Descartes Underwriting is a parametric insurance specialist covering climate risks including flood, wind, and hail. Like Understory, it combines advanced climate modeling with parametric trigger structures to serve property and specialty lines through reinsurance-backed capacity.
- Kettle: Kettle is a reinsurer using machine learning and satellite/ground data to price climate-driven perils, particularly wildfire. Comparable to Understory in blending proprietary data, ML models, and reinsurance capacity for hard-to-price climate risks.
- Jupiter Intelligence: Jupiter Intelligence provides climate risk analytics and physical-risk modeling for insurers, reinsurers, and asset owners. Highly comparable to Understory's Hyperlocal Climate Risk Engine in serving the underwriting and accumulation needs of P&C insurers.
Broad incumbents
- Munich Re: Munich Re is one of the world's largest reinsurers and an active backer/investor in climate risk analytics. Serves as both a partner (one of the top 10 reinsurers backing Understory's DOL program) and a potential competitor building internal parametric capabilities.
- Swiss Re: Swiss Re is a global reinsurance leader with major investments in climate risk modeling and parametric solutions. Like Munich Re, it underwrites capacity for Understory's programs while also developing competing proprietary climate analytics offerings.
- The Climate Corporation (Bayer): The Climate Corporation (acquired by Bayer) provides digital agriculture tools including weather-based insurance products for farmers. Comparable to Understory's agriculture insurance vertical and use of hyperlocal weather data for farm-level risk transfer.
Emerging players
- ICEYE: ICEYE operates a commercial SAR satellite constellation delivering flood and natural catastrophe monitoring data used by insurers. Comparable in providing hyperlocal, sensor-derived climate/peril data to insurance and reinsurance markets, but focused on flood via satellite rather than ground sensors.
- reask: reask provides catastrophe modeling and climate risk analytics using probabilistic ML models for typhoons, cyclones, and severe weather. Comparable to Understory's modeling layer, though reask is software-only and lacks Understory's proprietary ground sensor network.
- Cervest: Cervest provides AI-driven climate risk analytics for assets and supply chains, with a particular focus on physical climate risk for financial and corporate customers. Comparable as a data/analytics play serving insurance risk selection, though broader in scope than Understory's underwriting focus.
Market position
Strengths4 records
Weaknesses4 records
Competitive moat5 records
Key risks6 records
Key highlights6 records
Customer concentration
Understory social profiles
Digital presenceUnderstory financial estimates
Financial estimateRevenue estimate
Valuation estimate
Understory leadership team
Management profileNumber of profiles
Profiles4 records
Understory funding detail
Funding detailFunding overview
Funding rounds10 records
Investors14 records
Funding detail is available on the Subscription and Enterprise plan.Contact sales →
Understory M&A and investment
M&A and investmentM&A
Investments
M&A and investment is available on the Subscription and Enterprise plan.Contact sales →
Frequently asked questions about Understory
What does Understory do?
Understory is an insurance and climate risk technology company that combines its proprietary Dot™ weather sensor network with a machine-learning-driven Hyperlocal Climate Risk Engine to underwrite and price severe weather risk. It sells specialty insurance products — most notably Dealers Open Lot coverage for franchise auto dealerships and broader climate-risk solutions for agriculture and renewable energy — with automated loss detection and trigger-based payouts enabled by real-time ground-truth weather data.
Is Understory a public or private company?
Understory is a private company. It is classified as venture growth investor backed and is currently operating.
When was Understory founded?
Understory was founded in 2012. It employs 11 to 50 people.
Where is Understory based?
Understory is headquartered in Madison, United States, in the North America region.
How does Understory make money?
Two revenue lines are on record. Insurance Premiums are the primary driver. The others are weather Risk Technology Licensing.
Who are Understory's main competitors?
Direct peers on record are Arbol, Descartes Underwriting, Kettle and Jupiter Intelligence. Broad incumbents are Munich Re, Swiss Re and The Climate Corporation (Bayer). Emerging players are ICEYE, reask and Cervest.
Does Understory have an API?
No public API is recorded for Understory.
What industry is Understory in?
Understory's product category is Climate Risk Insurance. Its primary akta.pro industry code is EUABALAF, Insurance Underwriting, Pricing & Accumulation Tools (P&C, Specialty, Parametric), with a secondary code of FSAOAIAE, Risk Scoring, Hazard & Geospatial Analytics. Its NAICS code is 52412 and its SIC code is 6399.