Insurers ‘using new methods’ to combat wildfire risks – International – Insurance News


The Insurance Information Institute (III) says technological advancements from insurers and proactive risk prevention from policyholders have the potential to reduce damage caused by US wildfires.

A new report released by the III and tech consultant Capgemini says insurers with access to aerial imagery, land-based sensors, and sophisticated prediction tools hold critical technologies that unlock “new data potential” and enable more accurate risk assessments.

“More people are living in harm’s way than ever before, and hopefully this report will help them better manage their risk,” III CEO Sean Kevelighan said.

The report highlights the role policyholders can play in aiding risk prevention, noting an Insurance Institute for Business and Home Safety (IBHS) wildfire preparation program for California residents.

The program encourages homeowners to invest in durable roofs and flame-resistant vents to improve resistance against wildfires, which have become more prominent and stronger in recent years.

The report revealed that only $US5 billion ($7.53 billion) of the $US20 billion ($30.12 billion) economic losses from wildfires last year had been insured.

III non-resident scholar and San Jose State University Professor of Meteorology Craig Clements says climate change has been a significant factor in the increasingly costly wildfire activity.

“Warm temperatures and drier atmospheric conditions affect the fuel. If you get an ignition, these conditions make the fires burn more rapidly, more intensely, and harder to put out,” Dr Clements said.

The report also considers a broader implementation of parametric insurance products that pay policyholders a specific amount based on the occurrence of a particular event rather than traditional property policies.

“As wildfires and other climate-related catastrophes become more frequent, more severe, and harder to predict, global insurance demand is likely to increase,” the report said.

“The insurance industry, with its long experience in assessing, quantifying, and pricing all kinds of perils, must be involved in helping to manage these evolving risks, both for the protection of the clients it serves as well as for its own vitality and growth.”

Source link


Please enter your comment!
Please enter your name here