New reinsurance MGA fired up for growth with $25m funding injection

An insurtech start-up looking to reshape the $400 billion-a-year reinsurance industry by using advanced deep learning artificial intelligence (AI) technology for insuring against climate related risks such as California's wildfires has secured a $25 million funding deal with leading financial services investors including Anthemis.

Kettle was established in 2020 by Andrew Engler and Nathaniel Manning (pictured) as a reinsurance managing general agent (MGA) underwriting risks associated with climate change. It reinsured homes during the 2021 wildfire season.

Kettle uses AI/machine learning technology and proprietary algorithms to calculate probabilities of fire damage at the half square mile resolution. In 2020, its model predicted that the fourteen largest fires, which accounted for 98 percent of the damage, were in the top 20 percent of areas most likely to burn across California's hundred plus million acres. In 2021, it predicted the areas 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. There are 14 million structures in California, and in 2020 ~11,500 of them burned down, less than .1 percent," said Manning.

"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."

A three fold increase in catastrophes have caused more than $1 billion in damage over the past 15 years, according to NOAA.

Lauren Kolodny, partner at Acrew Capital, said: "Traditional reinsurers can't accurately underwrite climate risk - their methodologies  look to the past.

"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."

Kettle's $25 million round was led by Acrew Capital, with participation from Homebrew, True Ventures, Anthemis, Valor, DCVC, and LowerCarbon Capital.

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