Originally Published On Axios
Insurers deploy AI against California's Wildfire Crisis
By Kaveh Waddell
To keep up with California's unrelenting wildfire threat, some insurers are now turning to AI to predict fire risk with unprecedented, structure-by-structure detail.
Why it matters: This will allow them to cover homes in areas that they would otherwise have passed over — but potentially at the cost of hiking rates for those who can least afford it.
The big picture: Spooked by a recent surge in destructive fires that shows no sign of cooling off, insurers have backed away from underwriting in the most flammable parts of the state. They say the risk is sky-high, and there's too much uncertainty about where fire will strike next and what it will consume.
- Premiums are ballooning in fire-prone zones, and insurers are dropping thousands of homes in high-risk areas, according to California's Department of Insurance (CDI).
- Traditionally, insurers rely on fire maps and proprietary predictions from catastrophe modeling companies. These bring in detailed information about a property's location — but often overlook characteristics of the property itself.
Now, some insurers are getting creative. They are trying to pack in as much data as possible: information from building permits, records and codes — and, increasingly, satellite photos and aerial imagery from drones and aircraft.
- Automatically analyzing super-detailed, top-down images helps insurers understand crucial, property-specific risk factors.
- Some important ones: how close a house is to vegetation, how flammable that brush is and what the house's roof is made of.
Driving the news: MetLife announced this week that it's working with a Bay Area startup, Zesty.ai, to use this type of data for property-level scoring.
- Zesty.ai predicts risk based on building information, aerial imagery, patterns gleaned from examining decades of wildfires and data from fire scientists.
- MetLife has been extra conservative in fire areas, VP Carol Anderson tells Axios, in part because it has relied on traditional maps to assess risk.
- When MetLife implements the new scoring system early next year, it hopes to bring in new customers and retain old ones, Anderson says.