Can Wildfire Mitigation Stop the California Insurer Exodus?
Episode description
More and more people live in high wildfire-risk areas across the United States. In fact, according to CoreLogic’s 2023 Wildfire Risk Report, California, Colorado and Texas lead the nation in the number of at-risk homes and their total reconstruction cost value. The influx of people into these areas means that there is continued demand for insurers to provide coverage, even though climate change is increasing the potential for and the severity of these wildfires.
While some insurance companies have elected to no longer write new policies in California – a state that is particularly burdened by wildfires – there are opportunities to reduce risk both for homeowners and for carriers. Mitigation is a major component.
Mitigation is not just a trend but a long-term solution. When individuals, governments and insurers work together to create a buffer around a community by fortifying structures and removing potential sources of ignition, CoreLogic and Milliman showed that these efforts could correspond to a 55% reduction in the average total premium (not including reinsurance costs).
In part two of this Core Conversations episode, host Maiclaire Bolton Smith talks to Senior Product Manager Jamie Knippen about how preparedness for a hazard through education and mitigation is the key to creating resilience for individuals, communities, governments and the insurance industry.
In This Episode:0:51 – What is the advantage of using models to determine wildfire risk?
1:46 – CoreLogic and Milliman studied how significantly mitigation would have affected the outcome of the fire in Paradise, California.
4:19 – How did CoreLogic and Milliman get involved in this study?
6:13 – How can understanding a view of future risk rather than looking at historic wildfire events improve outcomes?
6:52 – Erika Stanley goes over the Natural Disaster Digest
7:53 – Adopting probabilistic models: the when, why and how.
8:50 – What is the future of wildfire insurance across the U.S.?
Links:
Up Next: How Will Property Data Help Manage the California Insurance Crisis?
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