100-mile-per-hour winds. 14-foot storm surges. Those were just some of the effects of Hurricane Sandy in late October 2012 when it hit the Atlantic seaboard. The superstorm was responsible for nearly 8 million businesses and families without power and $70 billion in damages, leaving tens of thousands homeless. Natural disasters, like Hurricane Sandy, are becoming more frequent and severe no matter where you live. Over the past five years, the U.S. has experienced an average of 18 billion-dollar climate-related disasters each year.
While the risk of natural disasters cannot be eliminated, Darren Wood saw an opportunity to help Americans who had gaps in their homeowner’s insurance after a disaster. He decided to create Iowa-based Recoop Disaster Insurance, an all-in-one disaster insurance. It’s the first and only multi-peril disaster insurance product that offers affordable prices and expedited lump-sum payments to customers following a natural disaster.
Read how Darren started this unique business venture with the help of key partners like Northwest Bank.
Natural Disaster Spurs New Business Idea
Darren has extensive experience in the insurance world. In his 25 years in the industry, he has served as division president for a top-25 insurance company as well as holding senior project management and operational leadership roles with a leading global insurance broker focused on employee benefits through Fortune 1000 clients. His background in providing insurance solutions for families became top of mind when Hurricane Sandy hit.
“After Hurricane Sandy hit, my thoughts immediately went to other hurricanes and natural disasters — earthquakes, tornadoes, winter storms — and those who have lost their homes, and their financial futures were in jeopardy,” said Darren. “I dug into looking to see what type of solutions were out there to help those affected, and I found a few options. And I wanted to help.”
After considering various ideas, in the spring of 2013 Darren came up with an insurance solution: Recoop Disaster Insurance.
“Our company is the first and only multi-peril disaster insurance product that pays a lump-sum cash benefit (up to $25,000) within an estimated 24 to 48 hours once an area has been included in a federally or state-declared disaster area,” said Darren. “Most homeowners’ insurance policies leave gaps in coverage, which is why we created this business — to pick up where insurance stops and help customers get back faster after a disaster.” The coverage includes hurricanes and seawater storm surge, wildfires, tornadoes, earthquakes, gas explosions, winter storms and dust storms.
Bringing in a Team of Experts for a Turnkey Solution
For eight and a half years, it was a slow-going process to put the pieces together and form Recoop Disaster Insurance. Creating an entirely new product in a highly regulated industry like insurance was the biggest pain point Darren had to overcome.
“It was a detailed process to bring together the right resources and backing to create a product for customers,” said Darren. “I had experience with selling and product management, but I was unfamiliar with calculating insurance premiums and reinsurance. I worked closely with actuaries to make sure it was financially viable. Then, I completed a series of market research efforts and customer surveys, which all came back positive.”
Darren says he made the decision early on to bring on experts in their field.
“In the first four or five months, I brought on a couple mentors to help bring my idea to life,” said Darren. “Both were former senior executives within the community: one on the financial service side and another who worked on the mortgage side. Then I partnered with a top-notch benefits administrator, claims handler, insurance carrier and reinsurance leaders. And then we outsourced our office processing to make sure our customers were taken care of every step of the way.”
The company went to market September 2022. Today the company has a staff of five, two of whom are based locally in Iowa.
“As we continue to get out into the marketplace and more people become familiar with our product, it's going to help families immensely,” said Darren. “It will help avoid financial ruin and the frustration that customers typically experience when they're dealing with other insurance companies.”
Establishing a Partnership With Northwest Bank
While Recoop’s initial funding came from a combination of its founders and angel investors, Darren wanted to explore other funding options. A few of Darren’s investors were existing Northwest Bank customers and spoke highly of their relationship with the bank. Darren met with Travis Simpson, regional bank president, to discuss commercial loans, and they have maintained a great partnership since.
“I explained what we were doing, our business plan and where we were going, and the relationship with Travis grew from there,” said Darren. “He immediately recognized the opportunity with our product, and we moved forward with a material line of credit. It's been an exceptional relationship.”
Darren also regularly uses Northwest Bank’s Treasury Management services, including Positive Pay. In addition, his company utilized the bank’s investment services for capital they have not used.
“Whatever we need from a financial standpoint, we are able to reach out with one call to Travis and he routes us to the right person,” said Darren. “We’ve never had a bad experience with anyone at the bank that we've dealt with.”
Another perk: Travis was able to make a connection between Darren and the Iowa Bankers Association, which has been a great networking opportunity for the company. Having a network of strategic partners has helped Darren take Recoop Disaster Insurance from an idea to an accessible consumer benefit.
Expanding Into the Future
Taking Recoop Disaster Insurance from point A to Z has been a tremendous journey for Darren, but he’s not stopping anytime soon. Darren’s goal in the next five years is to maximize brand awareness, continue to grow the business to all 50 states and set the company apart when the competition does come into the marketplace.
“We’re still the first and only product of this type, so we’re really trying to capture market share and brand awareness,” said Darren. “Our plans are to continue to evolve our company so we can provide as much coverage as possible to those in need after a disaster.”
Learning how to build a business and ultimately meld his ideas into a finished product has been extremely rewarding for Darren.
“I believed in my idea and my business and knew I had to weather the storm,” said Darren. “I took one bite at a time and continued to push forward. I’m excited to see how this solution can help others move forward after a natural disaster.”
Ready to begin your small business journey? Let us help you get started. Contact a Northwest Bank commercial banker today.
The Author
Travis Simpson
Regional Bank President
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