Reports & Research

The insurance industry has been grappling for years with the skyrocketing losses caused by wildfires. As ZestyAI unveils its annual Wildfire Season Overview, we can see that insurers are in a pivotal position to navigate the ongoing threat.

Wildfire Risk Isn’t Going Anywhere

While we are currently experiencing a brief reprieve from the wildfire devastation of the last few years, the ongoing threat of wildfire remains at an all-time high.

Extreme snow and rainfall across the West in 2023 have led to wetter-than-normal conditions that have acutely reduced the risk of wildfire. However, wetter conditions lead to vegetation growth, so despite 2023 presenting lower wildfire risk, the resulting vegetation accumulation, combined with persistent drought conditions in future years, will likely result in extremely high losses in the coming years. In fact, heavy rainfall has preceded many of the most severe wildfire years ever recorded in California.

Heavy rainfall has preceded many of the most severe wildfire years ever recorded in California.

Preparing for Future Wildfire Seasons

With high wildfire activity on the horizon, what steps can insurance companies take now to prepare for future wildfire seasons?

Here are three essential strategies:

1. Leverage Data for Better Understanding

Research by ZestyAI reveals that wildfires ravage 87% more land during drought years compared to non-drought years. With the western US still experiencing a megadrought that is the worst in over a millennium, it’s critical to understand the data and risks involved.

Not all homes face high risk. For the remainder, detailed property risk insights can highlight areas requiring risk mitigation. Integrate property-specific wildfire risk data into the underwriting and renewal process. This year is also an excellent opportunity to review a complete portfolio using an AI-powered wildfire risk assessment tool like Z-FIRE.

2. Educate and Empower Property Owners Through Transparency

Technology, particularly satellite/aerial imagery and artificial intelligence, can shed light on wildfire risks. Insurers can use this technology to assess the risk reduction measures that policyholders have implemented and understand how a property might withstand a wildfire.

This information is invaluable for educating homeowners and insurance agents. By knowing the specific actions that can be taken to reduce risk, such as clearing brush or using fire-resistant materials, both insurers and homeowners can be better prepared for wildfires.

3. Choose a Technology Partner Wisely

ZestyAI's Z-FIRE has set a benchmark by integrating loss data from over 1,500 wildfires and employing cutting-edge technology to derive insights on each property. By combining aerial and satellite imagery with machine learning and cloud computing, ZestyAI created Z-FIRE, a highly detailed wildfire risk assessment model.

Z-FIRE has been adopted by leading insurance carriers in every single western US state.

In 2022, Z-FIRE demonstrated remarkable performance. Its integration of data through machine learning and computer vision models has established Z-FIRE as a potent tool in wildfire risk assessment for both underwriting and rating.

Make Informed Decisions with Z-FIRE

Using Z-FIRE, insurance carriers, MGAs, and reinsurers can get access to actionable insights developed from detailed property-level risk factors. While wildfire losses may be inevitable, understanding in detail how individual properties contribute to average and tail risks is a large step forward.

The specific time and location of a wildfire is nearly impossible to predict. However, Z-FIRE can give carriers an assessment of the preconditions for that fire, and describe in detail the factors which contribute to it. Knowing, not guessing, which properties fall into a high-risk category is more important now than ever. We look forward to helping our customers through this fire season and many to come.

Z-FIRE Stands Alone in Compliance

Z-FIRE has been developed in partnership with top carriers and has been included in successful filings in California and many other western states. As regulators continue to push for additional transparency and accuracy in how insurers treat wildfire risk, AI-powered solutions provide a clear advantage because of their interpretability and sensitivity to changing conditions.

In 2023, California began requiring insurers to provide discounts based on mitigation measures, and in 2024 Oregon is poised to establish similar requirements on communications to homeowners. All of these changes create a burden on insurers, but those who can adapt to the new regulatory environment by leveraging knowledgeable partners like ZestyAI will have an advantage over competitors. AI is part of the solution, helping address climate risk and maintaining the insurability of properties across the US.

Download ZestyAI's 2023 Wildfire Season Overview 

ZestyAI has released its annual Wildfire Season Overview for 2023. This comprehensive report combines insights from recent wildfire events, prevailing drought conditions, and cutting-edge advancements in artificial intelligence to assist insurers in effectively managing wildfire risk.

Download ZestyAI's 2023 Wildfire Season Overview

Here are some key findings from the report:

A Chance To Prepare While Wildfire Fuels Accumulate

Despite a brief respite from recent wildfire devastation, the current threat remains high. Over the past decade, wildfire risk has notably increased, particularly in California. However, the occurrence of extreme snow and rainfall in the West during 2023 has temporarily reduced the risk due to wetter conditions.

It's important to note that vegetation accumulation and ongoing droughts will likely lead to substantial losses in the coming years. California remains highly susceptible to losses and significant vegetation growth. This temporary relief in 2023 creates an ideal opportunity for insurers to review the risk technologies they have in place and embrace innovative solutions to prevent future losses.

No Role for Drought in Underwriting

Drought is indicative of fire intensity, but not losses. Although drought is an important factor in seasonal wildfire risk, the presence of drought shouldn't drive underwriting. Instead, insurers should look at property-specific solutions that consider wildfire risk over the lifetime of a policy.

Research has shown that this year's heavy rainfall may be a leading indicator for severe wildfire years to come. A comprehensive understanding of buildings, vegetation, and mitigation methods at the property level is necessary to effectively manage future wildfire risk.

A comprehensive understanding of buildings, vegetation, and mitigation methods at the property level is necessary to effectively manage future wildfire risk.

Using Advanced Models to Adapt to Changing Risks & Regulations

AI-powered risk models play a key role in mitigation. Insurers who write business in wildfire states have found increasing value in AI-powered wildfire risk models as they offer actionable risk insights, adapt quickly to changing climate risks, and comply with all regulations.

Over the last year, several western states have begun to implement new regulations for insurers in response to the changing risk environment. Discounts and transparency for mitigation efforts and property-specific decisions may become an industry standard as they have in California and Oregon.

What This Means for Insurers

In evaluating wildfire risk, many analyses tend to focus on the number of fires and the size of the area they burn. However, what really matters to insurance companies and property owners is the loss of structures and what can be done to mitigate those losses.

For example, those providing insurance in California might be surprised to learn that despite smaller losses in 2022 compared to 2021, the total national count of acres burned and fires ignited in 2022 actually exceeded that of 2021. This mismatch between yearly wildfire activity and the number of structures lost suggests that wildfire losses are not simply dictated by wildfire activity.

The most significant factor is not how many fires start, or how far they spread, but the potential resilience of every structure and what the communities and homeowners have done to prepare for wildfire exposure. Research from ZestyAI and IBHS shows that for a more precise understanding of potential losses, insurers need to zoom in on individual properties. They should consider a structure’s location, building materials, surrounding vegetation, and efforts taken by the surrounding community to prepare for wildfires.

Modern wildfire risk tools like ZestyAI's Z-FIRE do just that. They analyze individual property features and measure the impact of those features on the probability of loss. They also factor in nearby vegetation, community preparations, local infrastructure, and the lay of the land. This property-centric approach doesn’t try to predict exactly what a wildfire will do. Instead, it gives valuable information on how and why properties might be damaged by wildfires.

These models don't just offer a simple risk score, but also help explain what makes a particular property vulnerable and what steps can be taken to protect it.

 
Find out more, including how Z-FIRE performed in 2022, in this year’s Wildfire Season Overview.

Download ZestyAI's 2023 Wildfire Season Overview

San Francisco, CA, April 19, 2023 – Today ZestyAI, the leading provider of climate and property risk analytics solutions powered by artificial intelligence (AI), and the Insurance Institute for Business & Home Safety (IBHS) released new research examining catastrophic losses from severe convective storms, particularly hail. The study focuses on hail-driven losses in property and casualty insurance.  

Hail losses are a persistent problem for property insurers’ risk management efforts. Historically, carriers have focused on intense events to predict hail risk, with supporting data confined to storms with hailstones larger than one or two inches. The study Small Hail, Big Problems, New Approach shows high concentrations of small hail are more important than previously thought, pointing to an opportunity to broaden data sets to account for the cumulative effect all hailstorms have on a roof’s susceptibility to damage over time, leading to a claim. 

This new research shows all hail needs to be accounted for when modeling and ultimately understanding losses. Using data from all hail events, not just those with hail that meet the severe criteria of one inch or greater, allows carriers to consider valuable data on smaller hailstone impacts. Additionally, insurers can integrate climate and materials science to better understand hail frequency and severity. Research suggests using this new approach could perform as much as 58 times more accurately than looking at events with large and very large maximum hail sizes alone, allowing carriers to more effectively assess hail risk, achieve more profitable underwriting and open up ratings to previously avoided areas.  

“As we’ve learned more about hailstorms, we've discovered storms that produce large concentrations of small hail are more common than we thought, and despite causing less individual damage than a single large hailstone, small hail, especially in high concentrations, is likely a meaningful contributor to the loss we see each year from hail,” said Dr. Ian Giammanco, managing director of standards and data analytics at IBHS. “Experiments also show large concentrations of smaller hailstones cause degradation to the asphalt shingles, specifically dislodging large amounts of granules. Once enough granules are lost, the underlying asphalt material can become more susceptible to aging and weathering. Repeated exposure to these types of hailstorms can shorten the life of an asphalt shingle roof and increase the damage caused by large hailstones in the next storm.” 

“Hail losses are a persistent problem for property insurers’ risk management efforts,” said Attila Toth, founder and CEO of ZestyAI. “Three of the nation’s five largest publicly-traded P&C carriers mentioned hail as a key concern in 2022 financial reports. Greater losses have brought attention to hail risk, and the insurance industry needs better approaches to solve this problem.” 

“Three of the nation’s five largest publicly-traded P&C carriers mentioned hail as a key concern in 2022 financial reports. Greater losses have brought attention to hail risk, and the insurance industry needs better approaches to solve this problem.” 

Hail risk can be especially costly to insurers because, unlike other catastrophic perils like hurricanes and wildfires, it can be difficult to identify the storm that caused a hail claim. As a result, insurance carriers could be forced to raise overall premiums or introduce high deductibles to compensate for the added costs.

As climate and materials science have developed, more data has become available providing  improved hail risk evaluation options that can lead to better decisions at earlier stages of the policy life cycle. Other benefits could include more profitable underwriting, a greater ability to rate previously-avoided areas and significantly reduced loss ratios.

For the complete ZestyAI and IBHS research paper visit this page.
 

About ZestyAI

ZestyAI offers insurers and real estate companies access to precise intelligence about every property in North America. The company uses AI, including computer vision, to build a digital twin for every building across the country, encompassing 200 billion property insights accounting for all details that could impact a property’s value and associated risks, including the potential impact of natural disasters. Visit zesty.ai for more information. 

About the Insurance Institute for Business & Home Safety (IBHS)

The IBHS mission is to conduct objective, scientific research to identify and promote effective actions that strengthen homes, businesses and communities against natural disasters and other causes of loss. Learn more about IBHS at ibhs.org. 

### 

For more information, contact:

Linsey Flannery

Director of Communications, ZestyAI 

linsey@zesty.ai 

416-939-9773 

Mary Anne Byrd

Communications Director, IBHS

mbyrd@ibhs.org

803-669-4216 

Reinsurance rates are spiking to an all-time high. Fitch estimated a 20-60% rate increase for cedants in the overall property reinsurance market at the January 1st renewals.¹ Terms and conditions are also tightening - many reinsurers are limiting their cedants to much higher attachment points², or exiting CAT-exposed lines altogether

The main drivers for uptick in reinsurance rates

Our research has found three drivers underpinning the trend:

1. Devastating CAT losses, particularly from secondary perils

59% of all CAT losses come from secondary perils³, and those losses have caused major shifts in the reinsurance landscape. Howden estimates that global property CAT reinsurance rates were up 37% at the January renewals⁴.

2. A new urgency to improve return on capital

“When the cost of capital is equal to the rate of return, something has to change.” - Aditya Dutt, CEO of Aeolus Capital Management⁵. The reinsurance industry has underperformed since 2017, with an average return on equity of just under 5%⁶. Poor underwriting performance was a key driver, with an industry average 101% combined ratio over the same period⁷. Reinsurers are poised to use the tightening market as a chance to improve performance, with Fitch forecasting a 4pp underwriting margin expansion for reinsurers in 2023⁸. Unfortunately for primary insurers, Goldman Sachs predicts that the same tightening market will create significant volatility for cedants⁹.

3. Value erosion in reinsurer investment portfolios

Macroeconomic factors are driving significant unrealized investment losses for reinsurers, particularly on fixed income portfolios due to rising interest rates. Aon estimates that these investment portfolio losses drove a 17% decline in global reinsurance capital across the first 9 months of 2022, with some players reporting equity value losses as high as 40-50% over that period¹⁰. Reinsurers will look to shore up these losses with better underwriting performance, which likely means tougher rates for primary carriers.

How property insurers can improve their odds with AI-powered predictive climate and property risk platforms

These factors mean that primary insurers can expect challenging reinsurance negotiations at the June 1st renewal deadline, particularly on property lines. However, new AI-powered predictive climate and property risk platforms can improve the odds for property insurers in three areas:

1. Rapid improvements in risk mitigation

Implementation-free portfolio reviews can quickly drive major loss ratio improvements.

2. Turn the tables of CAT risk screening in your favor

Improving data quality can lead to more favorable stochastic model portfolio screens, particularly with insight about the roof.

3. Enter the room as a leader in cutting-edge risk practices

Showing the same commitment to new technologies as industry leaders can help cedants build a better case.

Conclusion

With the right mitigation action and a cutting edge view of portfolio risk, cedants can navigate the upcoming 6/1 renewal successfully.

Learn more about how an AI-powered predictive climate and property risk platform can help you.

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Sources

1 & 8 - Fitch, Reinsurers’ Underwriting Margins to Expand by 4pp in 2023

2 & 3 - Gallagher Re, Gallagher Re Natural Catastrophe Report 2022

4 - Howden, Howden’s renewal report at 1.1.2023: The Great Realignment

5 - AM Best, Reinsurance: Roundtable Discussion on Renewals and What 2023 May Hold

6, 7 & 10 - AON, Reinsurance Market Dynamics

9 -  Reinsurance News, Hard market to increase volatility for primary insurers: Goldman Sachs

San Francisco, CA, September 20, 2022 – ZestyAI, the leading provider of property risk analytics solutions powered by Artificial Intelligence (AI), has developed a 180-day playbook to support insurance carriers as they work to meet the Mitigation in Rating Plans and Wildfire Risk Models regulation expected to be adopted by the California Department of Insurance (CDI) before year-end. The playbook reflects the company’s unique ability as the only comprehensive solution in the marketplace to help insurers meet or exceed every single requirement in the new regulation — meeting 100 percent compliance inside the tight 180-day window.

On September 7, 2022, Insurance Commissioner Ricardo Lara announced he had submitted the department’s insurance rating regulation recognizing wildfire and safety mitigation efforts made by homeowners and businesses, to the California Office of Administrative Law for final approval. This first-of-its-kind regulation will require all insurers in California to refile their existing rating plans on an aggressive 180-day timeline. 

“Eight of the ten most destructive wildfires in California’s history have occurred in the last five years,” said Attila Toth, Founder and CEO of ZestyAI. “While the new wildfire regulations will have a significant impact on California’s insurance industry, adapting to this peril is key to having a sustainable insurance ecosystem in California. As the leader in property-specific wildfire risk assessment, we have offered input at each step of this process. We are here to support admitted carriers with a turnkey solution complying with every single requirement as they navigate this process and work to meet the new regulations.”

The new wildfire safety regulation requires insurance companies to consider the structure of a home, its surroundings, and community-level mitigation. Insurers with concerns about the regulation can reach out to ZestyAI to get a complete explanation of how the regulations will impact them. This includes access to the 180-day playbook, which breaks down the regulatory compliance process into an orderly roadmap that addresses all three major challenges that insurers will face:

• Operational — The process of rapidly integrating new data sources, educating the public on how wildfire mitigation affects insurance policies, and a framework for a compliant appeals process.
• Rating — How to weight property-specific characteristics, including those with and without historical loss data, in rating plans as well as guidance on mitigation credits.
• Filing — Carriers who use a rating plan reliant on traditional wildfire models without property-specific information will need to overhaul their rating framework. Relying on multiple approved rate filings, ZestyAI has developed a comprehensive filing toolkit that can support carriers at every facet of the filing process.

ZestyAI’s Z-FIRE™ model has quickly become the leader in property-specific wildfire risk assessment. Using AI algorithms trained on more than 1,500 wildfire events across 20 years of historical loss data, Z-FIRE™ provides a level of detail that is of essential value to both the insurer and the homeowner.

The model was the first AI model ever approved as part of a rate filing by the CDI and the second wildfire risk model. It has been widely adopted across the Western U.S., where its use has been approved for both underwriting and rating. During 2021's APCIA Western Region Conference, CDI representatives expressed that the agency’s familiarity with Z-FIRE™  means in future filings the focus will be limited to the carrier's specific use of the model, not the details of the model itself, potentially greatly expediting the reviews of carriers using the Z-FIRE™ model.

ZestyAI’s Z-FIRE™ considers features such as topography and historical climate data in combination with factors extracted from high-resolution imagery of the property itself and its surroundings, including homeowner and community mitigation efforts, to provide both neighborhood and property-specific risk scores. 

A significant advantage to insurance carriers is that they can use these data elements to communicate with homeowners on what specific actions can be taken to lower their property’s risk, such as upgrading building materials and cutting down surrounding dry brush or overhanging vegetation. The impact of mitigation efforts can be significant. A joint study by the Insurance Institute for Business & Home Safety (IBHS) and ZestyAI, which studied over 71,100 wildfire-exposed properties, found that property owners who clear vegetation from the perimeter of their home or building can nearly double their structure's likelihood of surviving a wildfire.

About ZestyAI

ZestyAI offers insurers and real estate companies access to precise intelligence about every property in the United States. The company uses AI, including computer vision, to build a digital twin for every building across the country, encompassing 200 billion property insights accounting for all details that could impact a property’s value and associated risks, including the potential impact of natural disasters. Visit zesty.ai for more information.

Download Report

Today, ZestyAI released its 2022 Wildfire Season Overview. Each year, ZestyAI prepares a comprehensive overview to help guide insurers based on recent wildfire events, persistent drought conditions, and advancements in artificial intelligence for managing wildfire risk.

If it seems like wildfires are burning at all times of the year, it's not just you. Very destructive events, like last December's Marshall Fire, are occurring in months not typically associated with high wildfire danger. Those who study wildfires, including ZestyAI, have begun to start thinking in wildfire "years" instead of wildfire "seasons'. Strong wildfire years, with 10+ million acres burned, have quickly become the new normal. The last 10 years have been the worst on record for property and casualty (P&C) insurers when it comes to wildfire. 8 of the top 20 fires in California history, and more than half of the acreage burned by them, occurred in just the years 2020 and 2021.

What can insurers do to prepare themselves for persistent wildfires?

• Understand the Data: Instead of sticking with decades-old approaches, assess wildfire risk at the property level.
• Continue to Bring Transparency and Education to Homeowners: Insights from AI-based wildfire risk models may be passed on to homeowners and agents, enabling a much better understanding of wildfire risk.
• Find the Right Technology Partner: Aerial and satellite imagery, machine learning, and infinitely scalable cloud computing resources were combined to build the most granular wildfire risk assessment model (Z-FIRE™). Using Z-FIRE™, ZestyAI can accurately estimate an individual property’s wildfire risk, plus highlight the key property-level factors that contribute to that risk.

Click here to download ZestyAI's 2022 Wildfire Season Overview.

ZestyAI offers insurers and real estate companies access to precise intelligence about every property in North America. The company uses AI, including computer vision, to build a digital twin for every building in North America, encompassing 200B property insights accounting for all details that could impact a property’s value and associated risks, including the potential impact of natural disasters. Visit https://zesty.ai for more information.

                           The property and casualty (P&C) insurance industry has always been about protecting people and property against the unexpected. But in 2024, U.S. insured catastrophe losses reached $113 billion—nearly double the 25-year average of $58 billion.

For many carriers, the gap between collected premiums and total payouts, including operating costs, continues to widen, underscoring the growing financial strain of climate-driven risks. At ZestyAI, we can’t control the forces of nature, but we’re helping insurers adapt.

From Franklin’s Fire Policies to AI-Powered Resilience

The concept of insurance dates back to the Middle Ages, when merchants sought protection from unpredictable events like storms and piracy. Over time, the practice evolved into today’s property and casualty insurance, safeguarding homes, businesses, and communities.

In the United States, Benjamin Franklin advanced the industry by founding the nation’s first fire insurance company in 1752. By refusing to insure fire-prone buildings, his company not only mitigated risk but also set new safety standards. This principle of risk reduction has guided the industry ever since.

Today, ZestyAI is building on that foundation with AI-driven risk models that help insurers address modern challenges. While the tools have changed, the mission remains the same: to protect people, property, and the future.

Modern Tools for Today’s Challenges

At ZestyAI, we’re helping insurers address modern challenges with solutions designed to fit seamlessly into their workflows. Our AI-driven platform combines high-resolution aerial imagery, proprietary data, and advanced modeling to provide a clearer, more reliable view of risk.

Unlike broad, traditional approaches, we focus on delivering actionable insights at the property level, helping insurers:

• Modernize outdated processes without overhauling their systems,
• Improve underwriting precision,
• Optimize inspections and resources, and
• Strengthen their portfolios.

A key example of this is our work in wildfire risk modeling. ZestyAI’s proprietary wildfire loss database—built using data from 1,500 events over the last 20 years—helps insurers predict property-specific risks with precision. By understanding wildfire risk at this granular level, insurers can proactively reduce losses, guide mitigation strategies, and protect their customers with greater confidence.

Discover how ZestyAI’s regulator-approved solutions set new standards for accuracy, compliance, and fairness in insurance.

ZestyAI, the leading provider of AI-powered property and risk analytics, today announced that its Severe Convective Storm suite, including Z-HAIL™, Z-WIND™, and Z-STORM™, has received regulatory approval from the Minnesota Department of Commerce.

This milestone supports Minnesota insurers in improving storm risk assessment, enhancing underwriting precision, and supporting proactive risk management strategies.

Minnesota has seen significant losses from severe convective storms. According to data from NOAA’s National Centers for Environmental Information (NCEI), the state experienced three billion-dollar weather events in 2024 alone, with hail and wind causing extensive damage. A July storm in the Twin Cities resulted in more than $1.8 billion in insured losses, highlighting the need for innovative solutions to manage storm-related risks.

ZestyAI’s Severe Convective Storm suite delivers property-specific risk insights by combining climatology analysis with granular property data. Built on extensive loss data and validated by regulatory authorities, the suite equips insurers to assess and address storm risks with a higher level of accuracy and confidence. Key features include:

• Z-HAIL: Evaluates each roof’s unique characteristics, including accumulated damage, to predict which properties are likely to file a claim, even in the same neighborhood.
• Z-WIND: Uses AI-generated 3D analysis revealing pivotal insights about roof condition, complexity, and potential points of failure.
• Z-STORM: Predicts the frequency and severity of storm damage claims, examining the interaction between climatology and the unique characteristics of every structure and roof
  These models allow insurers to move beyond reactive damage assessments, helping them identify high-risk properties, allocate resources effectively, and support policyholders in reducing risks.

Bryan Rehor, Director of Regulatory Affairs at ZestyAI said:

“Minnesota’s exposure to hail and wind damage underscores the importance of property-specific insights. With this approval, insurers can access validated models to deliver precise underwriting and rating decisions and encourage risk-reduction measures among policyholders.”

This approval builds on a series of regulatory endorsements in key wind and hail-prone states across the Great Plains, Midwest, and U.S. South, including Texas, Colorado, Indiana, Missouri, and Iowa, among others.

National insurance carriers have long relied on sophisticated models to drive underwriting accuracy and profitability.

But even the most advanced systems can benefit from fresher, more granular, and unique data inputs.

That’s where ZestyAI comes in. With 97%+ U.S. property coverage and exclusive data points—like roof condition and building permits—ZestyAI provides national carriers with the data needed to supercharge their existing models and achieve unparalleled accuracy in risk assessment.

Every insurance model thrives or falters based on the quality of its inputs. Using computer vision and AI-powered insights, ZestyAI captures property-specific features with unmatched precision and is updated multiple times annually. This allows carriers to access insights they’ve never had before, including:

• Roof Condition and Complexity: ZestyAI’s 3D analysis evaluates every facet, penetration, and angle of a roof, providing a complete view that powers complex rating models.
• Parcel-Level Features: Detailed property-level data, such as driveway condition, building permits, lot debris, and overhanging vegetation, reveal nuanced risks for underwriting.
  Climate, Geography, and Infrastructure Variables: Comprehensive data encompassing topography, slope, climate factors, and critical infrastructure.

Why National Carriers Choose ZestyAI as a Data Partner

Adopting an off-the-shelf solution isn’t always the right fit for national carriers with robust internal modeling teams. Instead, these insurers benefit from ZestyAI’s ability to integrate powerful datasets into their existing infrastructure seamlessly. Key advantages include:

• Data Uniqueness: Proprietary insights like property updates and nuanced parcel-level conditions unavailable from public or conventional sources.
• Broad and Deep Coverage: 97%+ U.S. property coverage ensures nationwide relevance.
• Change Detection and Data Recency: AI-driven updates keep your models ahead of evolving risks with near-real-time insights.

By integrating ZestyAI’s data, carriers can complement their models and ensure their outputs are informed by the latest, most comprehensive property-level information.

Driving Precision with a Science-Driven Approach 

At ZestyAI, science and a hypothesis-driven approach form the foundation of our offerings. Hundreds of variables are tested for each model, carefully selected and validated to ensure they meet both logical and causal standards—not just correlations. This rigorous methodology ensures compliance with regulatory scrutiny and real-world risk prediction.

Immediate Benefits, Long-Term Value

• Enhanced Model Accuracy: ZestyAI’s data serves as a diagnostic lens, revealing what’s missing in your existing frameworks and sharpening predictions.
• Operational Efficiency: Recent upgrades to ZestyAI’s API infrastructure, including a 50% reduction in response times and a 10x increase in data processing power, ensure carriers can seamlessly integrate real-time insights into their workflows. These enhancements enable faster decision-making and improved scalability, helping insurers stay ahead in an evolving risk landscape.
• Regulatory Readiness: Transparent, explainable data sources ensure compliance with even the most stringent underwriting regulations.

ZestyAI, the leader in AI-powered property and climate risk analytics, today announced a partnership with THORE Insurance, a Texas-based company.

Johnathan Yazdani, President and CEO of THORE Insurance, said:

"After evaluating several options, ZestyAI was the clear choice for our underwriting needs. Far too often, our industry suffers preventable, foreseeable losses and chalks it up to a cost of doing business. No more. Zesty's comprehensive property insights and roof age solution stood out, offering the precision and scalability we need to grow our business in Texas year over year and maintain low prices for our members through underwriting excellence."

"Their data-driven insights and depth of 40+ property features made the decision easy for us, and we’re confident ZestyAI will be a key partner as we build for the future."

ZestyAI’s Roof Age insights, derived from building permits, aerial imagery, and advanced AI analysis, provide 97% data coverage across the U.S., addressing inaccuracies in self-reported roof data.

‍Recent research shows that 15% of roofs are at least eight years older than reported, highlighting the need for reliable, data-driven solutions.

The Digital Roof™platform uses AI-generated 3D analysis to assess roof attributes like condition, complexity, and potential failure points, while Z-PROPERTY™ Location Insights identifies property features such as vegetation overhang, swimming pools, and solar panels. Together, these capabilities deliver deeper insights to refine risk assessment and pricing.

“In addition to their appetite for innovation, THORE’s leadership clearly communicated a vision to serve Texas homeowners with fairly-priced, best-in-class insurance products,” said Sebastian Kasza, Director of Strategy and Business Development at ZestyAI.

Leveraging AI-powered, property-specific insights in underwriting and pricing is the best way that a carrier can achieve that ambition sustainably.

We are thrilled to partner with Jonathan and his team as they serve the Texas insurance market.”

By Attila Toth, Founder and CEO, ZestyAI 

“SaaS is dead.” 

With these three words, Microsoft CEO Satya Nadella sparked a global debate, challenging the foundation of enterprise operations. His prediction? AI agents will soon replace traditional SaaS workflows, moving business logic to a dynamic AI layer and leaving legacy tools behind. 

For property and casualty (P&C) insurers, this prediction is more than a tech trend—it’s a wake-up call. Carriers have invested heavily in SaaS platforms to modernize underwriting, claims, and risk management. But with AI agents poised to dominate, are these investments like castles built in the sand, vulnerable to the rising tide of AI? 

Let’s unpack what Nadella’s claim means for P&C insurers and explore how to prepare for a future where agentic workflows reshape this $2.6 trillion global industry. 

From Static Systems to Agentic Workflows

Over the past decade, P&C carriers have focused on modernizing their technology stacks, moving
to SaaS-based systems for policy management including underwriting, claims, and billing. These platforms promise efficiency gains, streamlined workflows, and improved business intelligence. Yet Nadella’s vision points to a future where AI agents bypass these systems altogether, directly interact- ing with data to execute tasks dynamically. 

Enter agentic workflows. 

Agentic workflows are powered by AI agents—autonomous systems that can analyze data, make decisions, and execute tasks in real-time without rigid reliance on predefined rules or interfaces. Unlike traditional workflows that depend on user interaction, agentic workflows dynamically adapt to the situation, accessing real-time data and leveraging advanced decision models to solve problems creatively. 

Let’s Break it Down With Examples:

• Underwriting: Traditionally, underwriters rely on policy management systems to assess risk, manually inputting and analyzing data. In an agentic workflow, an AI agent pulls data from internal and external sources, such as property imagery or weather patterns, and evaluates risk in real time, and proposes pricing autonomously.
• Claims: Instead of adjusters triaging claims by reviewing data and making decisions step by step, AI agents analyze First Notice of Loss (FNOL) data, cross-reference it with historical patterns, flag potential fraud, and recommend payouts or next steps—all in seconds. 

Think of agentic workflows as moving from a ‘static map’ to a ‘smart GPS.’ Traditional SaaS systems provide fixed routes, like a printed map or a AAA TripTik, where users must plan and follow a predefined path. In contrast, AI agents function like a GPS that dynamically adjusts to roadblocks or detours, guiding you in real-time to reach your destination more efficiently. 

This doesn’t eliminate the roles of underwriters or adjusters—it amplifies them. With agentic workflows, professionals transition from being data processors to strategic decision-makers, supported by AI agents that execute repetitive and analytical tasks. 

The question is not if, but how fast this shift will occur. In P&C, where SaaS investments are relatively new, the transition may take time. But the direction is unmistakable, and forward-thinking executives should prepare now.

How Insurance Leaders Can Prepare for the AI Era 

The shift to AI-driven workflows brings both challenges and opportunities. To stay ahead, insurance leaders must act now. Here’s how: 

1. Build AI-First Architectures 

Insurers must prioritize modular, API-driven platforms that enable seamless integration with AI agents. An AI-first architecture treats applications as interchangeable layers rather than static end- points, ensuring adaptability to future innovations without extensive system overhauls. 

2. Unify Siloed Data 

AI agents thrive on data, yet fragmented, siloed data remains a significant challenge for insurers. It’s not about choosing the “right” database—AI agents can interact with any data store. What matters is creating a unified and federated data structure that breaks down silos and provides AI agents with a cohesive view of organizational information. 

CIOs should prioritize data integration, ensuring underwriting, claims, customer, and risk data are accessible across the enterprise. A federated approach bypasses the need for lengthy consolidation projects while enabling AI-driven insights. 

3. Engage Regulators Early

AI workflows will only succeed if regulators are on board. Departments of Insurance (DOIs) need to trust the decision-making processes of AI agents and ensure they meet standards for transparency, fairness, and compliance. 

At ZestyAI, we’ve worked with state Departments of Insurance across the U.S. to gain approval for our AI models. Building trust with regulators requires proactive engagement, clear communication, and ongoing education. Insurers that lead in this area will not only gain competitive advantages but also shape the regulatory frameworks that govern the use of AI. 

4. Pilot Agentic Workflows 

Start small, but start now. Deploy AI agents in low-risk areas like claims triage or fraud detection. Early pilots provide valuable lessons and build organizational confidence in agentic workflows. 

5. Expand ROI Thinking 

AI agents are poised to fundamentally transform operations, requiring a broader perspective on ROI. Beyond traditional metrics like cost reduction or workflow efficiency, consider strategic gains such as: 

- Faster speed to market.
- Improved customer satisfaction. - Enhanced risk segmentation. 

6. Put Technology Partners to the Test

Carriers should evaluate their SaaS providers on their readiness to transition to agentic workflows. Ask pointed questions: What is their AI strategy? How do they plan to integrate AI agents into their products? - Are they prepared to support modular, dynamic workflows? 

The Bottom Line 

The future Nadella outlines—a world driven by AI agents—is as disruptive as it is exciting. For P&C insurance executives, it’s a call to action: the technology stack of today may not meet the demands of tomorrow. Preparing now by investing in AI-first architectures, building unified data structures, and engaging with regulators will position insurers to thrive in this new era. 

SaaS isn’t dead yet, but the writing is on the wall. The question is, are you ready to embrace the future? Are you building a castle ready to weather the waves?

Missouri’s severe convective storms are growing more destructive, with hailstorm-related claims skyrocketing by 245% in 2024 alone. To address this rising risk, ZestyAI has secured regulatory approval from the Missouri Department of Insurance for its Severe Convective Storm suite, including Z-HAIL™, Z-WIND™, and Z-STORM™.

Missouri’s Rising Storm Losses

Missouri’s vulnerability to severe convective storms is well-documented. Since 1980, 82 weather events have each caused over $1 billion in damages. In 2024, a March hailstorm—dubbed the “Gorilla Hail” storm—resulted in nearly 7,000 claims, a dramatic increase from just over 2,000 hail claims the previous year.

How ZestyAI’s Models Make a Difference

ZestyAI’s Severe Convective Storm suite provides property-specific risk assessments, enabling insurers to predict and manage extreme weather impacts with precision.

Key Features:

• Z-HAIL™: Identifies a roof’s susceptibility to hail damage and estimates potential claim severity using property-specific attributes like roof complexity and historical losses.
• Z-WIND™: Predicts wind claim frequency and severity by combining climatology with property-specific data such as roof structure and damage history.
• Z-STORM™: Delivers granular risk scores for storm claim frequency and severity, factoring in climatology, building characteristics, and roof design.

These AI-driven models help insurers proactively manage storm-related risks, allocate resources effectively, and encourage policyholders to take preventive measures.

Empowering Insurers with Advanced Risk Insights

Bryan Rehor, Director of Regulatory Affairs at ZestyAI, said:

Missouri’s exposure to tornadoes, hail, and damaging winds makes advanced risk assessment tools essential. By streamlining the regulatory process, we enable insurers to focus on protecting policyholders while reducing losses.

With regulatory compliance and validated loss data at its core, ZestyAI’s suite enables insurers to:

• Enhance underwriting precision and optimize deductible strategies.
• Provide policyholders with actionable insights to reduce risks and prevent losses.
• Move beyond reactive damage assessments to proactive storm risk management.

Looking Ahead

ZestyAI’s Severe Convective Storm suite has already received regulatory approvals in Texas, Colorado, Illinois, Indiana, and Iowa, with additional filings in progress. By equipping insurers with AI-powered tools, ZestyAI is modernizing the way storm risks are assessed, ensuring communities and insurers are better prepared to weather the storm.