Reports & Research

The landscape of hail risk management is undergoing a significant transformation. Our latest publication, "Hail Risk 2024: An Interactive Guide for Insurers," offers a critical examination, illustrated with compelling data, of the factors contributing to the alarming rise in hail-related losses over the last decade. Major changes to how hail is understood have changed how insurers should view the peril. This guide isn't just about understanding hail risk; it's about redefining how it is managed in the insurance industry.

Why This Guide is Indispensable:

• Losses Rising — Understand the key factors driving record-breaking hail losses, and why there's more to the story than just "climate change."
• Reinsurance  — Learn why insurance carriers now shoulder more of the burden due to changing risk transfer relations.
• The Right Tools  — Explore how AI-based climate risk models are supplementing stochastic and actuarial models for a full picture of climate risk.
• Actionable Steps  — See how leading carriers are applying granular, property-level insights and learn the proactive steps they're taking to mitigate risks and losses.

Ready to get up to speed on hail risk in 2024? Access the guide.

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.

ZestyAI, the leading provider of AI-powered property and climate risk analytics, today announced a strategic partnership with NEXT Insurance, a top commercial insurer specializing in small to medium-sized businesses.

Under this agreement, NEXT will adopt ZestyAI’s Z-PROPERTY™ and Z-FIRE™ models to enhance its underwriting processes with precise, property-level risk insights. Z-PROPERTY uses high-resolution aerial imagery and AI-powered analytics to assess roof condition, structural risks, and environmental hazards, helping insurers make more informed underwriting decisions.

Z-FIRE, adopted by over one-third of California’s insurance market, delivers highly accurate wildfire risk assessments based on 2,000+ historical wildfires, satellite imagery, and topographic data, ensuring that premiums reflect true wildfire exposure.

Lance Poole, Head of AI Underwriting at NEXT Insurance, said:

“ZestyAI’s peril-based risk models stood out for their ability to provide precise, actionable insights at scale, perfectly complementing our mission to help entrepreneurs thrive. This partnership strengthens our underwriting capabilities by delivering advanced data analytics that allows us to offer a faster, fully digital purchasing experience while maintaining best-in-class underwriting. By streamlining workflows and enhancing decision-making, we’re able to create innovative, tailored insurance solutions that meet the unique needs of small business owners, all while staying true to our commitment to simplicity and excellence."

Attila Toth, CEO of ZestyAI said:

"At ZestyAI, we are committed to bringing the power of AI-driven risk intelligence to the insurance industry. NEXT Insurance is redefining small business insurance with a fully digital experience, and we are proud to support that vision by providing precise, property-specific risk insights. With Z-PROPERTY and Z-FIRE, NEXT can enhance underwriting efficiency, optimize risk selection, and ultimately deliver smarter, more tailored coverage to small business owners across the country."

ZestyAI today announced its partnership with Safepoint Holdings, a regional property insurance group operating Safepoint, Cajun, and Manatee. Together, these platforms manage over 200,000 policyholders across Florida, Louisiana, Texas, Mississippi, and Alabama.

By leveraging ZestyAI’s advanced risk platform, Safepoint Holdings can analyze a high volume of properties with precision, enhancing underwriting accuracy and improving access to coverage for homeowners. Additionally, Safepoint Holdings is strengthening its loss cost control program by utilizing ZestyAI’s property insights to better predict and manage risk.

The partnership also enables Safepoint Holdings to optimize its inspection strategy, reducing costs and streamlining operations through high-resolution aerial imagery.

David Flitman, CEO of Safepoint Holdings. said:

“ZestyAI’s property insights have set a new benchmark for accuracy and innovation. The flexibility of their solutions and the ability to evaluate large insured portfolios in a matter of days provide tremendous value to us. This partnership will allow us to better serve our policyholders by proactively managing risk while making our operations more efficient.”

ZestyAI’s Advanced Risk Solutions Adopted by Safepoint:

• Z-PROPERTY Digital Roof™: Analyzes key drivers of roof-related risk—including material, shape, pitch, and condition—using AI-powered 3D modeling of high-resolution aerial imagery. These insights improve Safepoint’s risk selection process and optimize inspections by identifying properties requiring on-site evaluations, ensuring underwriting and renewals are both accurate and efficient.
• Z-PROPERTY Location Insights: Delivers detailed, property-specific risk insights for over 150 million properties across the U.S. Combining computer vision, machine learning, and high-resolution imagery,
  Location Insights provides critical risk insights on overhanging vegetation, lot debris, and more, enabling Safepoint uncover hidden risks, streamline workflows, and better align premiums to risk.
• Roof Age: Combines over 20 years of historical aerial imagery with verified building permit data to determine the accurate age of a roof with 92%+ accuracy. By eliminating reliance on self-reported or incomplete data, Safepoint can enhance pricing precision, reduce claims exposure, and make informed decisions about eligibility and coverage.

“By integrating our solutions, Safepoint Holdings can make better risk decisions, reduce costs, and expand coverage in states with high climate risk like Florida, Louisiana, Texas, Mississippi, and Alabama,” said Attila Toth, Founder and CEO of ZestyAI. “We’re excited to support Safepoint Holdings with the insights they need to serve their policyholders.”

This partnership comes at a pivotal time as Safepoint Holdings focuses on expanding its portfolio. With ZestyAI’s property-specific data, Safepoint Holdings can scale efficiently while maintaining reliable, cost-effective coverage for its policyholders. Safepoint Holdings operates with a combined policyholder surplus of approximately $150 million, with Safepoint Insurance Co. holding $70 million.

ZestyAI, the leader in AI-powered climate and property risk analytics, announced that Z-FIRE™, its advanced wildfire risk model, is filing-ready in California.

Z-FIRE can continue to be filed for rate segmentation and underwriting without further review under the Pre-Application Required Information Determination (PRID) process, which is currently focused on models that determine a catastrophe load factor.

Z-FIRE was last included in an approved California rate filing in 2024.

Z-FIRE leverages AI-driven analysis of over 2,000 historical wildfires, integrating satellite and aerial imagery, topography, and property-level characteristics to provide precise risk assessments. This approach is rooted in decades of science and experimentation by researchers, including the Insurance Institute for Business & Home Safety (IBHS).

With coverage spanning nearly 100% of U.S. properties, Z-FIRE is already trusted by more than one-third of California’s insurance market, including the California FAIR Plan, the state's insurer of last resort, to refine underwriting, enhance risk segmentation, and ensure that premiums accurately reflect the true wildfire exposure and vulnerability of each individual structure.

"For years, leading insurers have trusted ZestyAI to manage wildfire exposure in California and refine pricing segmentation with precision," said Attila Toth, Founder and CEO of ZestyAI. "Now, insurers can continue to confidently integrate it into their rate filings."

They can trust that Z-FIRE meets the highest actuarial and scientific standards, ensuring transparency and reliability for regulators, carriers, and policyholders alike.

ZestyAI continuously validates Z-FIRE’s performance through post-event analyses, assessing how well its risk designations align with real-world fire impacts.

Following the recent Los Angeles wildfires, preliminary analysis indicates that Z-FIRE’s highest-risk ratings closely correspond with the hardest-hit areas, with 94% and 87% of the areas affected by the Palisades and Eaton fires rated as high or very high risk by the model.

The model also captured how property-specific characteristics influenced damage patterns, even within the same fire perimeter, reinforcing the importance of granular, structure-level insights in wildfire risk assessment. Z-FIRE’s data also reveals more than 1.5 million structures in California face a high or very high risk of being within a wildfire perimeter.

With granular, property-specific insights, Z-FIRE allows insurers to move beyond binary "insure or drop" decisions. Instead, they can work with policyholders to reduce vulnerability—whether through defensible space measures, fire-resistant roofing, or other mitigation efforts.

Since its adoption, Z-FIRE has helped insurers confidently write hundreds of thousands of policies that might have otherwise been non-renewed or declined. By incorporating vegetation density, roof materials, and structural characteristics, the model enhances risk segmentation, reduces volatility, and strengthens market stability.

ZestyAI has engaged with the California Department of Insurance (CDI) over the years, including discussions during the early regulatory considerations of Z-FIRE. After an independent actuarial review in 2020, multiple carrier rate and underwriting filings leveraging Z-FIRE have been approved by the CDI. Moreover, ZestyAI participated in seven CDI workshops in 2023-24 and co-hosted a January 2025 webinar on the new regulatory framework.

Artificial intelligence is reshaping the P&C insurance industry, offering new ways to streamline underwriting, enhance risk management, and navigate evolving regulations.

But as AI adoption accelerates, insurers must ensure they’re using these technologies effectively—balancing innovation with compliance.

Our latest guide explores the most impactful AI applications in insurance, including:

• AI-powered underwriting and predictive analytics
• How regulators are shaping the future of AI in insurance
• Best practices for integrating AI while ensuring fairness and transparency

As AI-driven tools become the new standard, insurers who adapt early will gain a competitive edge.

Download our free guide to leverage these innovations while staying aligned with evolving regulations.

For insurers, accurate roof age data is essential. Yet, self-reported information often falls short.

Our research shows that 1 in 5 homeowners underreport roof age by an average of 8 years. These discrepancies create hidden risks that can impact underwriting, pricing, and overall portfolio performance.

How can insurers get a more accurate picture?

AI-driven insights provide 97% nationwide coverage, combining verified roof age with real-time condition data for a more comprehensive risk assessment.

Download our latest research for a breakdown of five critical insights that every insurer should know about roof age. 

Plus, get access to The Roof Age Advantage, an exclusive video that unveils how AI is setting a new standard for risk evaluation.

                           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.