The risk of wildfire is unlike any other, as today, 90 percent are caused by humans. That’s an alarming amount, considering all it would take is one inexperienced hiker failing to properly extinguish their campfire to scorch an entire mountain.
Insurers fear this risk more than most, especially with 2,763,464 acres burned in the U.S. since the start of the year—the second most NOAA has on record. Property and Casualty (P&C) carriers are finding themselves particularly vulnerable to wildfire risk, as this season is already off to a heated start.
Burning need for better wildfire data and analytics
Wildfire risk in Santa Clara, CA, showing impacted TIV by construction and occupancy type.
There is an unparalleled level of unpredictability with wildfires, which are commonly considered to be “natural catastrophes” despite the fact that they’re most often caused by human error. In the last 21 years, humans have ignited more than 840,000 fires, drastically changing the spatial and seasonal extent of wildfires. Furthermore, increased building development in the West, combined with climate change, is creating the perfect recipe for wildfires. Being proactive at the point of underwriting is imperative to properly scoring this type of risk. While no one can predict when and where someone is going to leave their campfire unattended, underwriters can gain a deeper understanding of what makes an environment susceptible to wildfire through factors including:
- Temperature and soil moisture
- Presence of trees, shrubs, and other potential fuel
- Lack of certain insects/animals that eat the vegetation that acts as fuel to the fire
- Areas of drought and locations that have experienced early snowmelt
- Human behavior
Being proactive about wildfire helps underwriters evaluate high-risk locations in their portfolio, but it doesn’t stop an event from occurring. Being able to react quickly and efficiently once a fire starts is equally as important as underwriting the risk, and requires just as much of a proactive approach. There is no time to sit and wait—insurers must be able to take immediate action once a wildfire starts spreading. SpatialKey empowers insurers to:
- Immediately identify the number and value of impacted policyholders
- Monitor the potential spread/path of a wildfire through factors such as floating embers, wind speed/direction, and areas of drought
- Track the wildfire as it occurs in near real-time
- Quickly mobilize claims team for response efforts
Wildfire risk showing properties within an event footprint and within one mile of the event footprint.
From underwriting to claims, insurers can feel confident in their risk selection and response with SpatialKey. While we provide the analytics for you to manage this risk before, during, and after it occurs, we know analytics couldn’t exist without data. Wildfire experts including RedZone, HazardHub, Impact Forecasting, and GeoMAC are directly integrated into our platform, giving our users the most up-to-date, comprehensive wildfire data when they need it most. Our data partners make it possible to immediately gauge the impact of fire embers, smoke, vegetation, and drought, making for smarter underwriting and improved event response. Gaining a deeper understanding of how these factors contribute to the spread of wildfire helps insurers evaluate the risk before they take it on, as well as forecast its path as a live event is happening. Additionally, our users also have access to historical event footprints, helping them prepare for the future by looking at the past, and creating a full, 360-degree approach to managing wildfire risk.
What are you waiting for?
Following the Sunshine Canyon wildfires in Boulder, Colorado, businesses and residents were left in a complete state of chaos, with many attempting to purchase insurance as the wildfire was occurring. One resident who was evacuated summed it up brilliantly when she said, "The problem with insurance is no one wants to think about the unthinkable until it happens." She’s right, and it’s on insurers to prepare their insureds for the unthinkable, not the other way around.Don’t underestimate wildfire this season—take action to create a data-driven portfolio. Get in touch with us today to learn more about how you can prepare.