Insuranceciooutlook

Insurtech Company, Kettle, is Leveraging AI to Insure Against Wildfires

Insurance CIO Outlook | Thursday, December 02, 2021

Fremont, CA: Over the next five to ten years, artificial intelligence (AI) will transform the insurance industry. AI will allow for smarter risk selection and pricing decisions, root out fraud, settle claims more quickly, produce more accurate reporting and forecasting, and – most importantly – completely transform the customer experience by automating routine tasks as well as augmenting decision making.

Kettle, a reinsurance startup that utilizes deep learning to better protect people from the growing risks related to climate change, such as wildfires in California, has begun reinsuring homes for the 2021 wildfire season and has raised a Series A funding round. Acrew Capital led the $25 million round, with participation from Homebrew, True Ventures, Valor, Anthemis, DCVC, and LowerCarbon Capital.

Kettle is introducing cutting-edge technology to the $400 billion-a-year reinsurance industry, beginning with wildfires in California. According to NOAA, the industry has witnessed a 68 percent drop in return on equity because of a threefold increase in catastrophes causing more than $1 billion in damage over the last 15 years. According to Calfire data, the Dixie and Caldor Fires in California burned over 700,000 acres and destroyed over 1200 structures in 2021.

Kettle, founded by Andrew Engler and Nathaniel Manning, is structured as a reinsurance Managing General Agent capable of underwriting these growing risks. Kettle is also establishing their own risk-taking entity. Engler has over a decade of experience in the insurance and reinsurance industries, most recently as the vice president of digital at Argo Group, a public insurer/reinsurer. Manning spent years as the CEO of Ushahidi, the biggest open-source software platform for community crisis response, and as USAID's first chief data officer working with data for humanitarian efforts.

"We are thrilled to be helping provide insight and relief to the California insurance market," remarked 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."

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