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Kettle heats up battle against climate change

Kettle makes its debut today at the Lloyd’s Lab accelerator in London, but the Bermudian-based outfit is already well ahead of some of the other ten participants in the prestigious programme.

Kettle Limited celebrated its two-year anniversary on March 1 and has been licensed by the Bermuda Monetary Authority as an innovative intermediary since March 2021. Kettle Re Ltd is licensed by the BMA as a collateralised insurer.

The reinsurance start-up uses advanced deep learning to better protect people from the growing risks associated with climate change, such as California's wildfires.

Kettle's technology and proprietary algorithms use terabytes of data from public and private data sources, such as NOAA weather data and Nasa's Modis and Lidar satellites.

The company’s neural networks run more than 140 million model parameters to calculate probabilities of fire damage at the half square mile resolution across the state.

The organisation is well into its stride, the market having supported Kettle last November in a $25 million Series A financing round that was led by Acrew Capital, with participation from Homebrew, True Ventures, Anthemis, Valor, DCVC, and LowerCarbon Capital.

Kettle has 26 staff at its offices in Bermuda and California, with five on the island including co-founder and CEO Andrew Engler.

Mr Engler will attend the first week of the Lloyd’s initiative with three colleagues, and then staff will rotate through the ten-week programme.

He is a veteran of the Bermuda market, having spent nearly five years at the Argo Group as vice-president, digital product and machine learning.

Mr Engler said: “Bermuda is our home and where Kettle was born. The fact that we can bring Silicon Valley and London capital, combine it with the world’s best data scientists, and empower it with the world’s most innovative regulatory framework creates a new paradigm. Lloyd’s Lab is an accelerant to this vision.

“Our goal is simple: take the best talent in machine learning and climate science, and combine that with pools of capital to create a sustainable safety net against catastrophes.

“Just like we have been able to bring Silicon Valley attention and capital into the island and reinsurance industry, we look to increase momentum from the legacy that Lloyd’s has established in risk transfer capital.”

He added: “Given the size of the company and our growth, we are well past the traditional accelerator. We are a much more advanced play, which works well with the Lloyd’s Lab model.

“It’s a good opportunity to try to execute on a proof of concept. We have multiple current POCs in development with partners already at Lloyd’s, and the ten-week accelerated framework aligns perfectly with our execution speed.

“Lloyd’s provides one of the most efficient models for businesses seeking to scale up.

“Kettle is one of the most advanced teams in the world for understanding climate-driven events or catastrophic events. We are using leading-edge statistical, mathematical and quantitative modelling techniques.

“If you match Kettle with the Lloyd’s market, you would have a very powerful combination.”

Kettle’s approach is markedly different than that traditionally taken by insurers, who have looked to the past in an effort to predict the future.

But that approach is flawed for reasons related to climate change and anthropogenics – environmental change caused or influenced by people, either directly or indirectly, such as people living in coastal areas or areas where wildfires are prevalent, or other dangerous areas.

Mr Engler said: “It is no longer an optimal way of understanding tail events or catastrophic events, so there needs to be some advancement in the way it’s understood or analysed.”

The importance of Kettle’s approach was underlined by one of the company’s supporters at the time of November’s capital raise.

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."

Andrew Engler, left, on a panel at last month’s Bermuda Risk Summit. Also pictured are Prashanth Gangu of SiriusPoint and Josephine Noddings of law firm Appleby (Photograph by Blaire Simmons)

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Published April 25, 2022 at 7:58 am (Updated April 25, 2022 at 7:38 am)

Kettle heats up battle against climate change

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