Reinsurtech Kettle completes $25m funding round
Reinsurtech business Kettle, licensed as an innovative intermediary in Bermuda, has completed its initial funding round. The company, which applies machine learning to climate change risk, particularly California’s wildfires, is already reinsuring homes it added.
The $25 million Series A round was led by San Francisco venture capital firm Acrew Capital and saw participation from Homebrew, True Ventures, Anthemis, Valor, DCVC, and LowerCarbon Capital.
Kettle was founded by former vice president of digital at Argo Group Andrew Engler and Nathaniel Manning, the former CEO of Ushahidi, the largest open-source software platform for community crisis response and the first chief data officer of USAID. It is structured as a reinsurance managing general agent and is also setting up its own risk-bearing entity.
The company’s technology and proprietary algorithms use data from public and private sources, including NOAA weather data and NASA’s MODIS and LIDAR satellites. Its neural networks, meanwhile, run upward of 140 million model parameters to calculate probabilities of fire damage at the half square mile resolution across the state.
According to the company, in 2020 its model predicted that the fourteen largest fires, which accounted for 98% of the damage, were in the top 20 per cent of areas most likely to burn across California’s hundred-plus million acres. In 2021, its model predicted the sites consumed by the Dixie and Caldor Fires as some of the most dangerous parts of California.
“We are thrilled to be helping provide insight and relief to the California insurance market,” said Manning.
“There are 14 million structures in California, and in 2020 ~11,500 of them burned down, less than .1%. While the risks of wildfire have certainly increased over the past decade, the key is understanding exactly where the risk is. If we can do that, we can bring stability back to the California insurance market.”
“When you take a minute to think about it, it becomes very obvious why traditional reinsurers can’t accurately underwrite climate risk – their methodologies look to the past,” says Lauren Kolodny, partner at Acrew Capital. “And our climate is changing in ways that can’t be predicted on the basis of historical data. Kettle is solving a massive, global problem. And we’re so thrilled to deepen our partnership with this incredible team.”