Kettle, a startup in the reinsurance sector that leverages advanced technology to tackle the growing risks associated with climate change, has successfully raised $25 million in a Series A financing round led by Acrew Capital.
With an initial focus on wildfire risks in California, Kettle uses advanced deep learning to better protect individuals from climate-related risks.
In 2020, the company’s model predicted that the 14 largest fires, which accounted for 98% of the damage, were in the top 20% of areas most likely to burn across the region’s acres.
In 2021, Kettle says that its model predicted the areas consumed by the Dixie and Caldor Fires as some of the most dangerous parts of California.
Wildfire is one of the so called secondary perils that is driving increasingly higher losses for insurers and reinsurers, and the rise in frequency and severity has been linked to the changing climate.
This year, the Dixie and Caldor Fires burned more than 700,000 acres and destroyed over 1,200 structures, according to Calfire’s data.
The reinsurance startup says that it has been reinsuring homes during the 2021 wildfire season.
Its tech and proprietary algorithms use terabytes of data from public and private data sources, including NOAA weather data and NASA’s MODIS and LIDAR satellite.
The firm’s neural networks run upward of 140 million model parameters to calculate probabilities of fire damage at the half square mile resolution across the state.
Alongside Acrew Capital, other participants in Kettle’s Series A funding round included Homebrew, True Ventures, Anthemis, Valor, DCVC, and LowerCarbon Capital.
Co-founder of Kettle, Nathaniel Manning, commented: “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%. 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.”
Lauren Kolodny, Partner at Acrew Capital, said: “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.
“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.”
Manning added: “Climate change is here, it’s right there in the words – the climate has changed. Now we need to build the best safety net we can to help people recover from these catastrophes.”
