Otonomi, a managing general agent (MGA)
ATX Venture Partners, Bering Waters Ventures, Greenlight Re Innovations, and GSR Ventures made the initial investment, later bringing the total investment to $4.4 million. Otonomi now has seven clients and is growing in several regions and types of coverage.
After launching its algorithmic underwriting model in the first quarter of 2023, Otonomi began carrying out plans to cover intermodal transportation models, starting with aviation cargo in April 2023, according to Yann Barbarroux, co-founder and CEO.
"We look at the transit time, the ETA – expected versus actual, and when we reach a certain threshold in number of hours, then our technology detects and pays out," he said. "That's the starting point."
Otonomi's parametric model covers damages, losses and risk caused by shipping delays, rather than direct damages to cargo or losses of cargo.
One type of goods covered in the model, however, is generally food and drugs – perishables such as produce, seafood, meat and flowers, and pharmaceuticals, vaccines, clinical trial materials and medical specimens. The other type of goods includes aerospace, technology and automotive, where delays in shipments of parts can delay production and therefore cause losses.
In the second half of 2023, Otonomi launched a specific parametric insurance pilot for pharmaceuticals and cold-chain assets. The company followed that by improving its time-critical logistics and freight forwarding offerings in the first quarter of 2024, and expanding geographically to Hong Kong and South America.
In May, Otonomi launched maritime transport delay coverage, followed by aviation delay insurance in July, plugging these components into a vision of intermodal coverage. "As always, a lot of it is data driven," Barbarroux said. "We essentially automate from end-to-end the quote, the underwriting, the tracking, cargo tracking, the detection events, milestones and automatic payment."
The maritime coverage product features "multivariate statistical modeling to essentially assess the risk of delay for certain trade lanes, shipping lanes, certain carriers, certain regions, certain weather patterns," Barbarroux said.
In the past few months, Otonomi marketed the maritime coverage in Asia and South America, specifically, Singapore, Hong Kong, Tokyo, Peru and Chile. The Asian markets need pharmaceutical shipments covered while the South American markets need produce and food shipments covered, according to Barbarroux.
Otonomi's vision of intermodal cargo insurance will continue with trucking and rail.
"We want an end-to-end solution," Barbarroux said. "The home run for us is essentially creating this seamless solution and platform for our customers. When they ship, they have a first mile, then they have a truck, and then maybe there's an airport, an air freight leg, and then an ocean leg, and another truck, and then maybe the last mile delivery through vans. If you have six, seven or eight legs, we should be able to actually offer coverage end-to-end."
