The Future of Insurance Podcast – Sean Harper

Co-Founder & CEO, Kin Insurance

Season 2, Episode 3, November 16, 2021

Guest Bio

Sean Harper is the co-founder and CEO of Kin, a startup, reciprocal insurer focused on markets impacted by climate change, like Florida and California, with materially different unit economics and a data-science driven approach to underwriting that has lead to strong growth and financial performance. He is a several-time entrepreneur based in Chicago. He was behind TSS-Radio and FeeFighters.

He studied Computer Science and Economics at the University of Chicago and got his MBA from the University of Chicago Booth School of Business.

Outside of his startup activities he has worked at Longworth Venture Partners and the Boston Consulting Group.

Highlights from the Show

      • Kin is a homeowners insurer, built differently in the $110 Billion U.S. market
        • They’re direct to consumer
        • They’re built on new tech to try to solve a lot of the complications existing carriers face
        • They’re a reciprocal exchange, allowing them to operate for a fee rather than to get into what they see as a conflict of interest with policyholders when it comes to paying claims
      • They had setup as an agent, then MGA, but kept wanting more control over the product and delivery of it, which is why they decided to go full-stack, and adopted the reciprocal exchange model
      • Sean and Lucas Ward, his co-founder, were both management consultants, which got them exposure to a lot of different industries, issues and solutions
      • They both had done startups in the payment space, and were looking for some of the same traits that had helped that space to evolve, and found that many were present in insurance yet the transformation hadn’t started yet
      • Doing some work for a home security company, they learned first hand about more of the complications in insurance, protection, and how insurance tends to ask customers for information
        • Sean shared a comparison from credit cards where they’d never ask customers if they pay on time or are good credit risks
      • Sean shared that GEICO, who spends billions on advertising, only spends about 5-6% on acquisition, while Allstate spends closer to 20% because it also has to spend nationally on advertising plus their agent commission
      • Kin sees a strong need to tie pricing to marketing, and shared examples from other industries, like credit cards, where Capital One won’t send you an offer unless they know you’re a customer they want and can price accurately
        • Don’t waste money marketing to people who won’t be a good fit for you
      • Sean addressed Evan Greenberg’s comments that the InsurTech insurers are all hype
        • He recognized that there’s a lot we can learn and respect from legacy carriers
        • But also that there are many real issues out there, and we shouldn’t ignore that either
      • Sean points out the roles of different types of companies in the economy
        • The role of stable, incumbent companies isn’t to innovate, it’s to provide stability and scale
        • The role of startups is to innovate and challenge
        • Insurance hasn’t had the amount of new entrants that other industries have, and so we have suffered from less innovation than we could have
      • We talked about Kin’s SPAC, and why they’re doing it
        • Kin is trying to build a big, iconic company, which is the kind that is public
        • The market is rewarding growth companies, so they wanted to take advantage of that timing
        • Their unit economics are the best of their peer group, as far as they’ve seen, so they wanted to act now
      • The SPAC they’re merging with is founded by Matt Higgins, who has been on Shark Tank, and was one of the original backers of Gary Vaynerchuk’s Vayner Media company (Gary V is also an owner of the SPAC)
        • Matt had a lot of experience in areas Kin wants support in, like marketing, acquisition and a strong presence in Florida, which is a key market for Kin
      • We talked about Kin’s geographic strategy
        • Sean shared that, while they want to be big, it makes sense to go after a niche, at least at first
        • Florida was a market where people care about insurance premium, and there was a lot of room for Kin to differentiate on pricing
        • With Florida, Louisiana and California, Kin addresses a $20 billion market, and plans to expand to a $50 billion TAM next year through growing to other states where climate change is making Kin’s approach more valuable
      • While they’ve achieved a lot, Kin has also had plenty to contend with, like customers who aren’t satisfied, bugs in the software, or the issues of greater scale
        • When it was smaller, the issues they faced were more about being in discovery mode
        • Now they’re facing scale problems, like how do you build and maintain culture when your team is bigger, more spread out, or you’ve hired lots of people who have never met due to the pandemic
      • Sean shared that being an entrepreneur is asymmetric in a good way
        • When you figure something out, it’s worth a lot more than the cost of the 10 things you tried that didn’t work
        • He tells other founders you have to stay alive because there’s something amazing that you could find tomorrow even if today was hard
        • There’s a lot of failure along the way, and it’s hard, so it’s important to keep this perspective


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