A Chicago-based property insurance company using technology to simplify homeowners policies has opened a St. Petersburg office.
Kin Insurance expects to tap local industry expertise to expand its office and grow its business, said Angel Conlin, chief legal officer and head of the local office.
Conlin is one of just three people in the St. Pete office now, but the company is about to add two more people and others are expected to join the staff by the end of the year, she said. Kin also is considering adding a call center in St. Pete in the first quarter of 2020.
The company is a great fit for the area, said J.P. DuBuque, president of the St. Petersburg Area Economic Development Corp. He cited the presence of existing property insurance firms such as Bankers Insurance, United Insurance Holdings Corp., ASI/Progressive, Vault and Neptune Flood.
“We are building a strong cluster with insurance carriers and insuretech companies,” DuBuque said. “The growth of this cluster shows that we have the talent and the ability to attract the talent that these companies need to succeed.”
Kin Insurance, a startup with millions of dollars in financial backing from venture funds and from other insurers, specifically targeted Florida for one of its first markets, said CEO Sean Harper, who co-founded Kin in 2016 with Lucas Ward, the company’s chief technology officer. Both Harper and Ward had financial technology industry experience, although not in the insurance industry.
“We were looking for something new and we really got excited about insurance. As entrepreneurs, the best thing is to find people who need a product and provide it to them,” Harper said.
Harper and Ward’s own experiences buying homes persuaded them that buying property insurance was more complicated, and more of a manual process than it needed to be.
“Then we started talking to some friends in places that are more exposed to the weather, mainly in Florida and in California, and we found out the situation was even worse there, and there was a big problem that needed to be solved. That’s what fires us up as entrepreneurs, to solve problems customers care about,” Harper said.
Storms and other catastrophes also create elevated risks for insurers. Like most insurers, Kin mitigates the risk by buying reinsurance, a type of insurance that insurers buy to limit their losses.
Kin also uses technology to reduce risk.
“We use lots of data in underwriting and customer signup flow that allows us to figure out which houses are most resistant to the weather,” he said. “We use a lot of newer data sources that are objective, and tell us with great accuracy in an unbiased way without inconveniencing the user most everything we need to know about the home.”
Technology also gives Kin an edge in responding to claims.
“We’re able to text users as we see a storm go over and get a report on whether they are OK. And from there, if they do have some damage we can use data sources like aerial imaging and photos from the user’s phone to get a jump on their claims,” Harper said. “That allows us to settle claims faster and with more convenience for the user.”
The company decided to open an office outside of its headquarters in Chicago to attract staff members who are used to working in catastrophe-exposed states like Florida.
Initially, the company focused on the Tampa-St. Pete area because of the people Harper wanted to add to the team. Conlin previously was vice president and general counsel at ASI/Progressive, a property insurer in St. Petersburg. Jason Fraley, who is Kin’s managing director of engineering, came from KnowBe4 in Clearwater, where he was vice president of engineering.
In considering sites in Tampa and in St. Petersburg, St. Pete was the clear winner, Conlin said.
“There are quite a few homeowners companies in the St. Pete area, so there’s such a deep pool of talent and people who really understand the catastrophe market. It’s a great place to live and a great place to work and really matches the Kin culture,” she said.
The company’s name means “family,” and Conlin described the culture as a “family feel.”
The culture match is a bonus, the EDC’s DuBuque said. “Every company is looking for the business case to set up an operation — financial, talent, real estate — but when we can add a great cultural fit, it means even more of a win for all involved.”
The EDC provided Kin with information about the community, DuBuque said. He introduced the Kin team to individuals at local organizations that are helping them build out their new office, and he is continuing to work with Kin to navigate workforce resources.
Kin currently is located in ClearLabs in the Grand Central District. It’s a co-working space, but Kin has the right to take 100 percent of the space, which gives Kin flexibility to grow, Conlin said.
“We’re looking for insurance and engineering development talent and we’ll be flexible in our growth plans so that we can get the right people,” Conlin said.
Same side as customers
Earlier this year, Kin launched Kin Interinsurance Network in Florida, its own insurance entity. The company historically did business as a managing general agent, acting as an agent and administering programs on behalf of another insurance company.
“That was good for getting started, but ultimately it became too inefficient and frustrating,” Harper said. “When you have that sort of arrangement, you are renting an insurance company’s license and you have to pay them a fee and it gets expensive over time. We would rather have lower prices for customers than pay money out to another insurance company. The other reason it was inefficient was that we make decisions really quickly at Kin, and we can do that because we have a really modern platform and flexible data structure. We found that when we had to go back and get the insurance company without that infrastructure to approve everything we wanted to do, it was slowing us down and it was frustrating.”
Kin Interinsurance Network is a reciprocal exchange. That’s an insurance entity owned by its customers, and managed by Kin Insurance. If the exchange does well, customers benefit through lower prices or other financial benefits.
“Whatever is left over belongs to policyholders, which is an additional benefit to using the product,” Harper said. “It’s really important to us that we’re on the same side as our customers.”
In addition to homeowners insurance, Kin offers private flood insurance. It began offering mobile home insurance this month, a few weeks after a Florida court said Florida Specialty Insurance Co. was insolvent and ordered it into receivership. Florida Specialty was one of only a handful of insurance companies in Florida writing mobile home policies, and some of those companies are hitting capacity, Harper said. Kin won regulatory backing to offer the product after an expedited filing that was approved in two days.
The company is also looking to add insurance for condo owners, as well as for homeowners who rent out their homes.