Aug 18, 2020

Kin Insurances secures $35mn to disrupt home insurance

Kin Insurance
Commerce Ventures
Home insurance
William Girling
2 min
Kin Insurance goes beyond using ZIP codes to determine premium prices in order to deliver affordable cover
Kin Insurance has managed to raise USD$35mn in its Series B funding round, driving its mission to transform the home insurance market...

Kin Insurance has managed to raise USD$35mn in its Series B funding round, driving its mission to transform the home insurance market.

The round, led by Commerce Ventures, brings Kin’s total funding so far to $86mn and will fuel a corporate vision centred around changing the market from “what it is to what it should be.”

Founded in 2016 by Sean Harper (CEO), Lucas Ward (President and CTO) and Stephen Wooten (Director of Engineering, and headquartered in Chicago, the company strives to make home coverage affordable via a data-driven, technology-based approach prizing constant innovation and customer-centricity above all else.

Satisfied with the results of the Series B round, Dan Rosen, Founder or Commerce Ventures stated, "As early investors in Kin, we're excited to see how fast the company has grown from a startup into a market-leader for directly marketed homeowner’s insurance.

"While many insurers spend much of their gross margin paying third-party agents, Kin has eliminated those costs, thus making the experience both simpler and more affordable for customers.”

Creating meaningful change

Not just a great thought leader but also a high achiever, Kin’s Interinsurance Network (KIN) was established in 2019 and has already been certified with an ‘A - Exceptional’ rating by Demotech

A reciprocal exchange wherein profits from the underwriting process are shared with customers, KIN is representative of the thoroughly different approach being spearheaded by InsurTech pioneers: actively making people’s lives better through insurance-based services.

“We believe in creating meaningful change for homeowners who need our solution the most. Since we established our carrier (KIN) last summer, we have been able to innovate much faster because we depend less on legacy insurance infrastructure,” said Harper.

Indeed, this shift away from outdated technology and impersonal customer experiences signifies what is truly disruptive about Kin itself. 

While most home insurance providers would use ZIP codes to generate policy premium costs, Kin opts to use more precise data to mitigate against factors which would otherwise make home cover prohibitively expensive, such as in natural disaster prone states like California and Florida.

The company’s determination and drive to help customers receive a cheaper product with the same high quality has already seen it earn recognition from Forbes as one of the most innovative finance companies in 2020 so far.

Share article

Jun 19, 2021

Insurtechs are winning the race with legacy system companies

Tom Allen, Founder, The AI Jou...
3 min
Insurance has long been due an overhaul. The AI Journal’s founder Tom Allen explains how innovative insurtechs are changing the incumbent narative

Nestled in its own place within the world of financial services, insurance is arguably more unpopular than retail banking.

That’s hardly surprising given that, from a customer service perspective, insurance is something of an off-kilter transaction. You pay a sizable premium in exchange for a service you hope you will never have to use. This image problem is exacerbated by ubiquitous tales of insurers not paying out when it is time to make a claim.

The insurance sector has long been due to an overhaul, and this is where the disruptive force of insurtech comes in - one of fintech’s most upwardly mobile subcategories. Accordingly, last year, insurtech in the UK alone attracted £262m in investment, a growth of 60% on 2019, according to Tech Nation. Insurtech’s momentous growth has been captured in a new report by The AI Journal exploring this burgeoning sector. 

What exactly is insurtech?

Put simply, insurtech refers to technological innovations that seek to make insurance cheaper to buy and more efficient to use. In a similar vein to fintech, the large, established institutions have been dipping their toes into insurtech, but it’s the disruptors who are genuinely looking to shake up the status quo, diving into and exploiting those areas that traditionalists have little imperative to explore.

Examples are price comparison sites (one of the earliest forms of insurtech that was eventually snapped up by the insurers it initially sought to disrupt), claims software, customisable policies, or even smart-tech-enabled dynamic policies whose premiums can fluctuate depending on changing circumstances.

The latter, for instance, could use someone’s fitness tracker or smartwatch to monitor fitness levels, thus reducing the premium of a life insurance policy; or track a GPS system that records the location of a car and assesses risk levels accordingly.

Most consumers tend to shop around for their insurance needs and perhaps end up buying their contents insurance with one provider, their car insurance with someone else, and their pet insurance with yet another underwriter. Managing all these different policies, with their varying renewal dates and payment terms can be complex. This has led to the increase in apps that pull everything together.

More prosaically, insurtechs are developing AI that uses machine learning to act as an insurance broker, eliminating the need for a human intermediary and therefore offering more cost-effective and impartial advice.

Insurtechs and risk

But there are some obstacles in the way of insurtech’s continued evolution.

Insurance companies are averse to risk. Understandably so, as at the crux of the industry is the role of the actuary, whose job it is to analyse and measure the probability and risk of future events. So it’s little wonder that there’s a reluctance among the traditional players to welcome the disruption that insurtech brings.

Insurance is heavily regulated, a minefield of legality and labyrinthine jurisdiction, which means the idea of shaking it up can be anathema. And why would they, when their old-school business models are working perfectly fine?

There’s an understandable nervousness and unwillingness to work with startups, who themselves need to work with the bigger firms in order to underwrite risk.

While it seems like a catch-22 situation, there is growing, if cautious, interest from insurance companies, who can see the benefits of insurance with a friendlier face, innovative solutions, and a competitive edge through differentiation. As that tentativeness dissipates, the growth of insurtech will gather even more momentum.

Tom Allen's analysis is based on the findings of a new report on the fintech and insurtech industries produced by The AI Journal

Share article