Verisk Wildfire Model is the First Catastrophe Model Under Review for Insurance Ratemaking in the State of California
02 Janeiro 2025 - 3:16PM
UK Regulatory
Verisk Wildfire Model is the First Catastrophe Model Under Review
for Insurance Ratemaking in the State of California
Newly-Announced Regulation from the California
Department of Insurance Will Address Property Insurance
Availability by Allowing Forward-Looking Catastrophe
Models
Jersey City, Jan. 02, 2025 (GLOBE NEWSWIRE) -- In a
groundbreaking step toward a more resilient and sustainable
property insurance market in California, Verisk (Nasdaq: VRSK), a
leading global data analytics and technology provider, announced
today that it is the first modeler to request a review of its
wildfire catastrophe model by the California Department of
Insurance (CDI).
This development is made
possible as one part of California Insurance Commissioner Ricardo
Lara’s Sustainable Insurance Strategy, which includes the decision
to allow catastrophe models to be used by insurance carriers as a
critical tool for assessing catastrophic risk. Verisk is the first
to submit a model after the regulation went into effect on January
2, 2025.
Verisk’s Extreme Event
Solutions pioneered the catastrophe modeling business in 1987 to
support the insurance industry’s ability to provide resilience to
communities and businesses. With its longstanding tradition of
best-in-class modeling, Verisk brings decades of experience and
technical expertise to help insurance companies understand and
manage the complex landscape of natural disaster risks. The Verisk
Wildfire Model for the United States incorporates leading knowledge
of the wildfire hazard and vulnerability as well as recent trends
in variables that impact the extent of wildfire risk in the Western
United States, including in California, which saw more than 391,000
acres burned in wildfires in 2023 alone.
California’s property
insurance market has faced unprecedented challenges as wildfire
risks and claims costs continue to rise. The use of catastrophe
models in California is expected to provide consumers, insurers,
and regulators with enhanced insights into natural disaster risks
and increased insurance availability across the state. The
initiative balances transparency and innovation, helping secure
California’s property insurance market for the future.
Today’s pioneering submission demonstrates Verisk’s commitment
to supporting Californians and the CDI’s efforts in ensuring that
California’s insurance industry is adaptable and responsive to
emerging challenges by enabling:
- Strengthening of California’s Insurance
Market: This process showcases how insurers, modeling firms,
and the CDI can work together to create a more stable, competitive,
and resilient property insurance market. Verisk’s submission sets
the stage for insurers to utilize catastrophe models in
California.
- Use of Catastrophe Models in Rate Filing: As the first
catastrophe modeling company to be reviewed in California, Verisk
is taking a proactive step in advancing fair and accurate risk
assessment. This enables insurers to accurately reflect and
consider the wildfire risks encountered by California homeowners
and businesses.
- Further Validation of Model Integrity: The
newly established pre-application required information
determination (PRID) process allows the CDI to examine model
integrity and ensure public review and compliance with Proposition
103. Verisk’s best-in-class modeling has a long tradition of
regulatory acceptance throughout the United
States.
“We’re proud to be the
first catastrophe modeler to work with the California Department of
Insurance to offer a modeled assessment of wildfire risk and to
help bring stability to the insurance market,” said Rob Newbold,
president of Extreme Event Solutions at Verisk. “This is a pivotal
moment for California’s insurance market, one that promises
improved resilience and stability for providers and potential
insureds.”
Learn more about the
Verisk Wildfire Model for the U.S.
###
About
Verisk
Verisk (Nasdaq: VRSK) is a leading strategic data analytics and
technology partner to the global insurance industry. It empowers
clients to strengthen operating efficiency, improve underwriting
and claims outcomes, combat fraud and make informed decisions about
global risks, including climate change, extreme events,
sustainability and political issues. Through advanced data
analytics, software, scientific research and deep industry
knowledge, Verisk helps build global resilience for individuals,
communities and businesses. With teams across more than 20
countries, Verisk consistently earns certification by Great Place
to Work and fosters an inclusive culture where all team members
feel they belong. For more, visit Verisk.com and the Verisk
Newsroom.
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