Understory

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.

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

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

• Weather risk insurance
• Climate risk analytics
• Weather sensor networks
• Parametric insurance
• Catastrophe risk modeling

Headquarters

HQ city

Madison

HQ country

United States

HQ region

North America

Offices1 record

Markets served

GTM type

B2B

Offering type

Services

Cost components

Technology or R&D, Personnel, Operations, Marketing or Sales, Supply Chain, Others

Revenue model

1. 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.
2. 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

Go-to-market motion2 records

Distribution channels3 records

Marketing channels3 records

Core 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

Named customers3 records

Segments3 records

Ideal customer profiles3 records

Technology focussed Yes

API detail

Has API

No

API docs

API detail

Core technology

AI maturity

App detail

AI capability4 records

Feature5 records

Partnerships

Four partnerships are on record, tiered core, major and minor.

• Skyward Specialty Insurance GroupcoreChannel Partner/ Reseller/ DistributorSkyward 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 SolutionscoreImplementation/ SI/ Consulting PartnerMarsh 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 ManagementmajorImplementation/ SI/ Consulting PartnerMcLarens Claims Management provides claims administration for Understory's Dealers Open Lot program, with oversight from Member Claims Committee.
• KPMGminorOthersKPMG 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

Direct 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

• Xx.com/UnderstoryWx
• LinkedInlinkedin.com/company/understoryinc

Revenue estimate

Valuation estimate

Number of profiles

Profiles4 records

Funding overview

Funding rounds10 records

Investors14 records

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A

Investments

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about Understory