Berkshire Hathaway Homestate Companies has announced that it has expanded its partnership with Zesty.ai to leverage its AI-powered wildfire risk model, Z-FIRE across 12 states.
Z-FIRE is designed to enhance insurers’ risk selection and rate setting while helping them to understand the impact of climate change on wildfires and in turn their portfolios.
Brian Hall, Vice President of Products and Underwriting at Berkshire Hathaway Homestate Companies, stated, “Unfortunately, wildfires are impacting communities well beyond the western U.S., and managing that risk requires advanced models that help us truly understand wildfire risk at the individual property level. Zesty.ai’s model has outperformed our homegrown wildfire risk model.”
“We started working with Zesty.ai last year and saw an immediate opportunity to leverage granular wildfire insights that allow us to confidently write policies that commensurate with a property’s true risk.”
Z-FIRE provides regional and property-specific risk scores along with an explanation of the specific risk factors affecting the property. Using artificial intelligence that has been trained on more than 1,500 wildfire events across more than 20 years of historical loss data, it considers property-level features that influence risk.
Attila Toth, Founder & CEO of Zesty.ai, said, “The Berkshire Hathaway Homestate Companies have always been known for taking a progressive, innovative approach to risk management, and as wildfires continue to reach new geographies we commend them for being proactive with their approach to rating and underwriting around wildfire risk.”
“The broad adoption of Z-FIRE, which is now used in rating and underwriting across the entire Western US, is a critical piece of hardening the insurance industry and their customers to defend against climate risks.”
The partnership expansion comes at a critical time for the insurance industry, as a recent report from (re)insurance broker Aon found there were three separate wildfires in 2021 alone that generated economic losses beyond $1 billion, which outlines the growing importance of property-specific risk models for maintaining coverage in wildfire-prone states.
Aon formed its own partnership with Zesty.ai in 2019, expanding in 2021 with the intent to focus on the accelerated deployment of AI and Machine Learning (ML) applications.
