This year, California wildfires have torched 1.4 million acres, an area bigger than Connecticut. Nine thousand homes and other structures have burned. While brand-name insurers like Allstate ALL -0.7% and State Farm are suffering from a surge in homeowner insurance claims, another industry is gasping for air behind the scenes: reinsurance. Reinsurers cover companies like Allstate when they see big losses, typically paying out 60% of claims for catastrophic events. To make up for lost profits and rising risks, reinsurers in California have raised their prices by about 600% over the past five years.
San Francisco startup Kettle thinks its sophisticated statistical models can predict wildfires better than any other reinsurer, and it plans to offer lower prices as a result. It officially launched today and recently closed $4.7 million in seed funding from True Ventures, Acrew Capital, Homebrew Ventures, Anthemis, and Inspired Capital.