We at @meanwhilelife have closed a $40M Series A co-led by @FulgurVentures and @hiFramework with participation from Wences Casares This round gives us significant capital to power our journey of building the world's largest long-term insurance and savings company. 1/

We offer home insurance coverage built to last. Get a quote: https://t.co/7R9HRCtGUp

In Q4, we saw our revenue climb 48% year-over-year with Kin-managed reciprocal exchanges, generating our first full year of positive net income! 📈 We're now open for business in 10 markets. Read more about our Q4 2024 results ➡️ https://t.co/aS9raL9kBu

https://t.co/I4WLOMEHJt #109 this year!

3/ Since Kin is a technology business, our G&A increases at a much slower rate than our revenue. The result was that revenue or gross profit (at Kin revenue is the same as gross profit) grew 56% year over year, while operating expenses grew only 4%.

2/ Since Kin is a direct to consumer business, we basically breakeven on a unit basis when we acquire a customer. The renewals, however, have nearly 100% contribution margin. As an increasing share of our business are renewals, our profitability continues to increase.

1/ I am super proud of the team at Kin for putting up some great YTD results and turning the corner from negative operating income (-10% in 2Q22) to positive operating income (26.7% in 2Q23). https://t.co/0yaWcpUste

19/ Conclusion: We need more data to decide if an average price in Florida that’s only 65% higher than the national average is reasonable (in subsequent thread), but it’s pretty obvious that homeowners insurance in California has been artificially cheap for a long time.

18/ Conclusion: homeowners insurance prices had lagged the cost of new housing significantly over the past 10 years and were due for an increase.

17/ Conclusion: in addition to global warming, the macroeconomic factors of inflation and higher cost of capital are contributing to the recent increase in homeowners insurance costs (and decrease in availability where the regulator artificially depresses prices).

16/ In addition to the other deflationary forces at work throughout the economy, the raw ingredient for insurance is capital, and capital was remarkably inexpensive from 2011 to 2020, which surely played a big role.

15/ If the cost of insurance had increased as much as the cost of houses, the prices in 2020 would have been $1,350 in CA and $2,699 in FL.

14/ Over that time period the insured value of homes increased significantly as homes got nicer, larger, more high tech and more expensive. Over that time period the average price of a house in the US rose from $275k to $384k - 3.78% annually.

13/ In Florida the rate was even lower, with a 1.27% annual growth rate over the same time period.

12/ Let’s look at how this has evolved over time. While California has seen recent increases, that follows a long period of constant prices, for an annual growth rate of 2.8% from 2011 to 2020.

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10/ With CA, with wildfires, high building costs, and requires significant reinsurance, 16% cheaper than IL, which has none of those things, it’s no wonder that many insurers such as Allstate and State Farm are saying they can’t make a profit in CA at current rates.

9/ On that basis it’s interesting to see that in 2020, Florida wasn’t the most expensive, Oklahoma was, presumably because of their tornado and hail activity. It’s even more surprising to see that CA was even cheaper, at $941 / year vs. $1,290 / year nationally.

8/ The insured value is not the same as market value because it excludes the cost of the land which, in places like CA, is the majority of the cost of a property.

7/ The average house in CA is a bit fancier than in less wealthy parts of the country, so it makes sense to look at the data holding the insured value of the home constant. Here is the same chart, but only for homes with an insured value between $300k - $399k.