Farmers increases insurance eligibility for wildfire areas
Farmers Insurance has today announced that it has adopted innovative technology created by Zesty.ai to increase home insurance eligibility in high wildfire areas following approval from the California Department of Insurance (CDI). The company says it will be introducing an “innovative approach” to help manage its US wildfire exposure as it assesses wildfire risks to homes in California.
"Farmers is excited to be a leader in helping to address the state's complex homeowners insurance marketplace by introducing a new approach to underwriting risks and using Zesty.ai's innovative new technology, the Z-FIRE™ scoring model, to supplement our existing processes," said Keith Daly, President of Personal Lines for Farmers Insurance.
"We want to thank Insurance Commissioner Ricardo Lara and his team for their willingness to give us the opportunity to introduce advanced technologies to help meet the needs of California's consumers”, Daly added.
Leveraging high-resolution imagery, Zesty.ai’s Z-FIRE risk scoring model is a proprietary predictive risk evaluation platform that uses artificial intelligence to identify property attributes impacting the level of a property’s wildfire risk.
Chief Executive Officer and Founder of Zesty.ai, Attila Toth, said: "Zesty.ai's work with Farmers to successfully implement the latest AI technology to accurately assess the risk of wildfires is another step forward in managing a problem that has claimed 194 lives and drove US$57bn in economic losses over the past five years in California.
"We are proud that this partnership expands access to essential insurance coverage for many Californians to help protect their livelihoods and communities from natural disasters”, he said.
Daly added: "We remain committed to working with Commissioner Lara, consumers, and other stakeholders to do our part to help make the insurance marketplace in California stronger and more resilient. At Farmers, we understand innovation is key to meeting the needs of consumers' evolving expectations and to our ability to deliver maximum value to our customers”.
Below are some facts about wildfires courtesy of the National History Museum of Utah.
- Lightning strikes the Earth over 100,000 times a day. Of these, 10-20% cause a fire.
- Man-made causes such as arson or plain carelessness (like smoking in forested areas or improperly extinguishing campfires) by individuals is the biggest cause of wildfires in the U.S.
- More than four out of every five wildfires are caused by people.
- An average of 1.2 million acres of U.S. woodland burns every year.
- A large wildfire, or conflagration, is often capable of modifying the local weather conditions or producing “its own weather”.
- Lodgepole pines and their closely related jack pines have cones that release their seeds only when they are opened by fire.
- Naturally occurring fires, as well as controlled burns, clear out underbrush and help prevent even greater wildfires.
- Many animals in the food chain benefit when patches of forest are transformed by wildfires into clearings.
- Forest fires move faster uphill than downhill. The steeper the slope, the faster the fire travels.
CB Insights: US Insurtechs Are Competing In A Global Market
In the first half of the year, insurtech companies around the world have raised US$7.4bn, nearly doubling their funding in Q2. According to Digital Insurance, insurtechs have raised US$4.8bn in Q2—an 89% increase in funding from Q1. But US firms are no longer the sole beneficiaries.
What Are the Stats?
Out of the 15 Q2 mega-rounds—those that top US$100mn—only eight included American firms. Pretty good, you might say. That’s over half! But US companies only made up 38% of the deals, which marks a 10% drop from Q1 and a 12% drop from 2020. Technically, therefore, US insurtechs are less influential than they’ve been in the past. But who says this is a bad development?
Despite my American citizenship, I’d argue that a more globally diverse insurance market is only for the best. Many of the world’s citizens who could most benefit from improved insurance services live outside of the States—and deserve local, tech-savvy services.
Why Does This Matter?
You’re always going to see the typical insurtech contenders from Western countries. For instance:
- German-based wefox: US$650mn Series C
- UK-based Bought By Many: US$350mn Series D
- US-based Collective Health: US$280mn Series F
But it’s critical that we address risk across the world. American insurtechs might be some of the most technologically skilled firms in the industry, but it’s not their first goal to address floods in Southeast Asia, crop destruction in China, and COVID complications in South Africa. That’s why we should celebrate that the recent Q2 round included insurtechs from 35 different countries.
According to CB Insights’ Q2 2021 Quarterly InsurTech Briefing, this was the first time that they’d observed insurtech activity in Botswana, Mali, Romania, Saudi Arabia, and Turkey. And ‘from a product, service, distribution, and underlying risk perspective, we—as a society and as an industry—are moving at an unprecedented speed’, says Dr. Andrew Johnston, Global Head of Willis Re InsurTech.
Just ask CB Insights. InsurTech value propositions have resonated with the world.