The Future of Insurance – Nationwide's Brian Anderson & Kinetic's Haytham Elhawary

The Future of Insurance

Haytham and Brian join the show to share the story of how Nationwide and Kinetic worked together initially as an investment, and then to build an MGA backed by Nationwide to help reduce worker injury through the application of Kinetic's IoT-based intervention that helps stop dangerous movements as they're happening. Their story is the first case in the new book in The Future of Insurance series, Volume III. The Collaborators.

Brian Anderson is a partner at Nationwide and a former management associate in the company's Financial Leadership Rotation Program. Prior to joining Nationwide, Anderson was an intern at JPMorgan Chase in data analytics. Brian also worked as a venture fellow at Innovate Indiana Fund, where they served on the board of directors for Apex Therapeutics, Cause.it, and Fathom Voice. Anderson began their career as an intern in business development and M&A at Cephalon, Inc. (Teva Pharmaceuticals).

Anderson has an NBA from the Kelley School of Business at Indiana University, and a B.A. in economics from Colorado College.

Haytham Elhawary is cofounder and Chief Strategy Officer of KINETIC. Guided by a mission to help the front-line worker stay safe and healthy, he has led the development of a smart wearable device to reduce workplace injuries. KINETIC is reinventing workers compensation insurance by including its wearable technology as part of the policy.

Elhawary holds a PhD in biomedical engineering from Imperial College London and a Mechanical Engineering degree from University of Navarra in Spain. His professional experience includes the development of medical robots at both Philips Electronics and Harvard Medical School. Prior to launching KINETIC in 2014, Elhawary served as Executive Director of the Zahn Innovation Center, a hardware startup incubator.

Elhawary and his company are based out of New York, where he also writes theatre reviews and loves to do improvised comedy.

• Haytham Elhawary is co-founder and CEO of Kinetic
  • They started in 2014 to build tech to reduce workplace injuries, primarily in frontline workers
  • This was inspired by watching his mother, a nurse, get injured a lot from moving patients, and seeing the impact it had on her life
• Brian Anderson is a Partner at Nationwide Ventures
  • They met Haytham in 2016, and were impressed by what the team had built
  • Given Nationwide Venture's focus on things that connect to the company's mission, this appealed to them, as did how far the team at Kinetic got on a shoe string budget
  • Nationwide chose to invest in Kinetic at that time, and see if there were opportunities for the insurance side of the business to work with Kinetic
• It was hard to get investment in the safety tech space because most VCs weren't thinking about that back then, making Nationwide a very rare and appropriate kind of investor for Kinetic when they met
• Brian talked about how, as investors, you need to be open to net new ideas if they want to find exciting new opportunities rather than letting your biases close you down to them
• The VC team introduced Kinetic to the Workers Comp team to look into a pilot opportunity, but the net result of the pilot wasn't strong, so Kinetic went off on their own and found self-insureds to test with and grow
  • Not working out in that pilot wasn't a loss, though, as both teams learned a lot from it to see where it may not work, why, and what they can do instead, which was useful
• After 4 years and close to 35k workers wearing the device, Kinetic had data on dramatic reduction in injuries – 53% fewer injuries and over 70% fewer lost days from injuries – proving the impact their solution can have
• With that knowledge, they looked at how they can accelerate their impact, and learned about the MGA model as a way to sell insurance connected to the impact of their device
• That lead to Kinetic working with Nationwide E&S as the capacity for their insurance product
  • The VC team opened the introduction, but it took the team at Kinetic being prepared, knowing their data, understanding what needed to be done, etc., to get the E&S team to get on board
  • The two teams met in the summer of 2021, and were writing policies by December, which is incredibly fast
• They had talked to multiple carrier partners, but some things really stood out about Nationwide's approach
  • Kinetic wanted to distribute the product themselves through their own broker relationships, and wanted to underwrite with their data
  • They didn't want to do the more core insurance things like regulatory compliance or claims because they lacked the skills and people to do it right, and Nationwide was happy to manage those things
  • They also were upfront about not knowing everything about what they're trying to do because it's the first time they were doing it, and Nationwide was open and understanding about it being a learning process for both of them
• There are always risks of a big company moving at its own speed, which can be too slow for a startup, and Nationwide was able to move very fast here
  • The Venture team was helpful in trying to problem solve speed issues, but never forced anything or demanded it, instead working to be collaboratively internally
• Kinetic finished their first year 12x ahead of Nationwide's projections for premium, and the loss ratio is 20 points better than the industry number
  • This shows that the idea is viable, the technology is helping protect people, and giving it away with the insurance is proving to be the right answer

This episode is brought to you by The Future of Insurance thought leadership series (future-of-insurance.com) from Bryan Falchuk.

Follow the podcast at future-of-insurance.com/podcast for more details and other episodes.

Music courtesy of Hyperbeat Music, available to stream or download on Spotify, Apple Music, and Amazon Music and more.