Chicago-based insurtech startup Kin Insurance secures $35M Series B to disrupt the $100 billion home insurance industry
The homeowners’ insurance industry in the US in 2020 by market size is $106 billion, according to IbisWorld. Surprisingly after many years of technology innovation in other sectors, legacy insurers in the homeowners’ insurance industry still rely on outdated and inflexible technology. Enter Kin Insurance, a Chicago, IL-based insurtech startup that is modernizing an industry rife with inefficiency. Kin helps homeowners get better insurance and make home insurance easy and affordable.
Today, Kin announced it has raised a $35 million Series B round of funding to bring its solution, piloted in Florida, to homeowners across the U.S., starting with states most affected by severe weather. The round, which brings the company’s total funding to date to $86 million, was led by Commerce Ventures.
Backers also include Hudson Structured Capital Management Ltd. (doing its reinsurance business as HSCM Bermuda), Flourish Ventures, QED, Alpha Edison, Allegis NL Capital, Avanta Ventures (venture arm of CSAA Insurance Group, a AAA Insurer), August Capital, the University of Chicago via its Startup Investment Program, and others.
Founded in 2016 by seasoned financial technology entrepreneurs Lucas Ward, Sean Harper, Sebastian Villarreal, and Stephen Wooten, Kin is a fully-licensed home insurance technology company that provides affordable coverage to homeowners in catastrophe-prone regions like Florida and California. Kin’s proprietary platform allows the company to develop and launch new products in as little as a week, price risks in real time, and ingest more data than competitors. Kin’s technology also reduces general and administrative expenses, which constitute roughly 15 percent of premiums at legacy homeowner’s insurance companies.
“We believe in creating meaningful change for homeowners who need our solution the most,” said Sean Harper, Kin’s CEO and co-founder. “Since we established our carrier last summer, we have been able to innovate much faster because we depend less on legacy insurance infrastructure.”
Whereas legacy insurers rely on outdated, inflexible technology, Kin’s proprietary platform allows the company to develop and launch new products in as little as a week, price risks in real time, and ingest more data than competitors. Kin’s technology also reduces general and administrative expenses, which constitute roughly 15 percent of premiums at legacy homeowner’s insurance companies.
Unlike traditional insurers which spend about 17 percent of premiums paying outside agents and maintaining the infrastructure to support them. Kin sells its products directly to consumers rather than through outside agents. By selling directly to consumers, Kin eliminates those costs.
“As early investors in Kin, we’re excited to see how fast the company has grown from startup into a market-leader for directly marketed homeowner’s insurance,” said Dan Rosen, founder of Commerce Ventures. “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.”
By structuring as a reciprocal exchange, Kin has aligned interests with policyholders. Because policyholders actually own the exchange, they benefit when claims are low and have a voice in what the company does.
“We are excited to increase our investment in Kin and to continue to support the company’s mission to provide simple and affordable insurance coverage to homeowners,” said Andrew Sagon, Vice President with HSCM Bermuda. “Kin’s leadership team has done a commendable job of transferring structural efficiency gains to its customers in the form of more affordable coverage, and we are thrilled to support Kin’s efforts as the business enters its next phase of growth.”