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.

ZestyAI announced today a new partnership with California Casualty, a trusted auto and home insurance provider serving educators, police officers, firefighters, and healthcare workers for over 110 years.

The collaboration will enhance California Casualty’s wildfire underwriting and pricing capabilities while reinforcing its long-term commitment to serving California’s community heroes and supporting the California Department of Insurance’s Sustainable Insurance Strategy (SIS).

Enhancing Accuracy, Supporting Affordability

California Casualty will deploy ZestyAI’s Z-FIRE™ model and Wildfire Mitigation Pre-Fill to better align premiums with property-specific wildfire risk and recognize homeowners’ efforts to mitigate that risk.

These advanced models analyze each property’s vulnerability based on factors such as topography, vegetation, building materials, defensible space, and the characteristics of the built environment.

Unlike traditional models that stop at the wildland-urban interface, Z-FIRE accounts for the dynamics of urban conflagration, where fire spreads rapidly from structure to structure in densely built neighborhoods. Wildfire Mitigation Pre-Fill complements this by automatically surfacing mitigation features at scale, bringing greater accuracy and transparency to underwriting.

Todd Brickel, Senior Vice President, Chief Risk & Product Officer at California Casualty, said:

“As wildfire threats intensify, our responsibility is to ensure that educators, peace officers, firefighters, and healthcare professionals continue to have access to reliable and affordable coverage."

"Partnering with ZestyAI equips us with data-driven insights needed to price risk accurately, reward mitigation, and sustain our role as a long-term solution in California’s insurance market.”

Commitment to California

California Casualty has long stood with California’s community heroes, protecting their homes in both city neighborhoods and wildfire-exposed areas. Even as other insurers have reduced their footprint, California Casualty continues to expand access to coverage in support of Commissioner Ricardo Lara’s Sustainable Insurance Strategy.

Through its investment in advanced wildfire analytics, the company is ensuring that affordability and availability can coexist in California’s evolving insurance landscape.

The strength of Z-FIRE’s analytics was reaffirmed during the 2025 Los Angeles wildfires, when the Palisades and Eaton fires escalated into fast-moving urban conflagrations.

The model’s performance reinforced how advanced analytics can anticipate where fire risk is greatest and help insurers strengthen preparedness and resilience well before events occur.

These insights enable California Casualty to maintain confidence in providing coverage for community heroes throughout California’s most challenging environments.

Attila Toth, CEO of ZestyAI, said:

“We are proud to partner with California Casualty, a company that has served community heroes for more than a century.”

“Our AI-driven models provide the transparency, accuracy, and property-level detail needed for insurers to remain confident in challenging markets, rewarding mitigation efforts and supporting regulatory goals for long-term stability.”

Built and validated on more than 2,000 historical wildfire events and two decades of claims data, Z-FIRE has been widely adopted by insurers across the West and recognized by regulators for use in both underwriting and rating.

ZestyAI, the leading provider of AI-powered property and climate risk analytics, today announced that Universal North America Insurance Company, a property insurer, part of the One Alliance Group of companies, has adopted ZestyAI’s Roof Age solution to bring greater accuracy and confidence to property risk assessment across its portfolio.

Why Accurate Roof Age Data Matters

Roof-related claims are among the costliest in property insurance. Yet insurers have long struggled with inconsistent or incomplete roof age data. ZestyAI’s analysis shows that nearly one in three roofs are at least five years older than recorded in policy data, creating blind spots that drive higher losses and mispriced policies. 

How ZestyAI’s Roof Age Model Works

ZestyAI’s Roof Age solution closes this gap by synthesizing building permit data with two decades of high-resolution aerial imagery, applying advanced machine learning to deliver verified roof age estimates with 97% U.S. coverage.

Strengthening Portfolio Performance

"Accurate roof data is foundational for managing one of the costliest drivers of property insurance losses,” said Miguel Barrales, President of Universal North America Insurance Company. “ZestyAI’s Roof Age solution provides the reliability we need to make more confident risk decisions and strengthen portfolio performance.”

"For years, insurers have had to make critical decisions without reliable roof data, and the cost has been enormous,” said Attila Toth, Founder and CEO of ZestyAI. “Universal North America Insurance Company’s adoption shows what’s possible when carriers embrace trusted, property-level insights to strengthen their portfolios and the market as a whole.”

ZestyAI, the leading provider of AI-powered property and climate risk analytics, today announced that its non-weather water risk model, Z-WATER™, has received approval in Wisconsin for use in underwriting and rating.

Why Non-Weather Water Losses Are Rising

Non-weather water is one of the costliest and fastest-growing perils in homeowners insurance, now ranking as the fourth costliest peril overall, with claim severity up 80% over the past decade—surpassing hurricanes. These losses stem from everyday risks like burst pipes, appliance failures, and plumbing leaks. With average claim costs now exceeding $13,000, their financial impact rivals catastrophe events.

How the Z-WATER Model Works

Z-WATER is built, tested, and validated with real insurer loss data, ensuring accuracy and regulatory credibility. The model uses computer vision to analyze aerial imagery alongside tax assessor data, permit records, climatology science, and infrastructure insights to assess key property-level risk factors. By modeling how these variables interact, Z-WATER predicts both the frequency and severity of non-weather water claims with up to 18x greater accuracy than traditional models.

What This Approval Enables for Insurers

With this approval, insurers in Wisconsin can begin using Z-WATER to:

• Set more accurate, property-specific rates
• Align coverage with actual home vulnerabilities
• Optimize inspections and mitigation strategies, such as the adoption of water sensors
• Reduce cross-subsidization and improve portfolio performance

Regulatory Confidence in Explainable AI

“Non-weather water is one of the most frequent and expensive sources of loss for insurers, and it behaves differently than other perils,” said Bryan Rehor, Director of Regulatory Strategy at ZestyAI.

“Z-WATER captures the property-level features that truly drive risk—such as plumbing systems, home design, and even vegetation patterns, giving insurers a much clearer picture of where losses are likely to occur.

"This approval demonstrates that regulators recognize the value of AI models that are explainable, data-driven, and validated against real claims," he added.

Part of a Growing Nationwide Regulatory Track Record

This approval adds to ZestyAI’s growing regulatory momentum. Across five perils, including wildfire, hail, wind, storm, and now non-weather water, ZestyAI has secured more than 70 approvals coast-to-coast.

In addition to these peril models, ZestyAI’s Z-PROPERTY™ solution has also earned nationwide approvals, giving insurers trusted roof and parcel-level insights with the same regulatory credibility.

Southern Oak Insurance Company, a Florida-based insurer specializing in personal residential property coverage, has adopted ZestyAI’s AI-powered property risk platform to improve visibility into property condition and exposure across its homeowners portfolio.

By analyzing structural and environmental vulnerabilities, such as roof degradation, overhanging vegetation, yard debris, and secondary structures, ZestyAI’s platform equips Southern Oak to take targeted actions that help reduce losses and manage exposure more effectively. These granular, property-level insights also offer a clearer view of changing risk conditions across one of the most challenging insurance markets in the country.

Southern Oak is leveraging two core capabilities within ZestyAI’s Z-PROPERTY solution:

• Digital Roof applies AI to high-resolution aerial imagery to assess roof complexity, materials, and condition, flagging structural vulnerabilities before they become claims. 
• Location Insights evaluates the broader parcel to surface risk factors such as vegetation overhang, yard debris, and secondary structures that can amplify storm losses or drive claim severity.

“ZestyAI stood out for its ability to provide deep, 3D visibility into the condition and complexity of the properties we insure.”

“ZestyAI stood out for its ability to provide deep, 3D visibility into the condition and complexity of the properties we insure,” said Tony Loughman, CEO of Southern Oak Insurance Company. “These insights help us improve our risk decisions and manage exposure more effectively across a high-risk geography, while continuing to deliver value and stability to our policyholders.”

“Southern Oak is taking a proactive, data-driven approach to strengthen portfolio decisions,” said Attila Toth, Founder and CEO of ZestyAI. “In Florida’s uniquely challenging insurance market, resilience depends on seeing risk clearly at the property level—and acting on it.”

ZestyAI today announced a new enhancement to its Severe Convective Storm (SCS) risk suite that enables carriers to adjust model inputs and risk scores based on mitigation efforts. 

The enhancement gives insurers a structured and scalable way to reflect real-world improvements, such as upgrading roof materials, replacing aging roofs, or addressing structural deficiencies, directly within property-level risk assessments.

What the New Capability Enables

Carriers can now instantly update risk scores based on verified property data, enabling three key use cases:

1. Reflecting completed mitigation: Recognize risk-reducing actions like roof upgrades or structural improvements in real time, improving rating accuracy and customer satisfaction.
2. Correcting inaccurate data: If errors are identified, such as incorrect roof material, carriers can transparently correct inputs to ensure fairer, more accurate risk assessments.
3. Simulating future changes: Carriers can model the potential impact of proposed upgrades before they occur, helping agents and homeowners understand the value of mitigation and reinforcing behavior that reduces future losses.

Why It Matters for Carriers and Policyholders

Kumar Dhuvur, Co-Founder and Chief Product Officer of ZestyAI, said:

“Models should be powerful, but also flexible and responsive to real-world improvements.”

“By giving carriers the ability to incorporate mitigation and field data into model outputs, we’re supporting transparent, action-oriented risk management that benefits both insurers and homeowners.”

This mitigation-aware functionality is already in use across ZestyAI’s wildfire products, including Z-FIRE™ and Compliance Pre-Fill, where it supports critical regulatory filings and enables carriers to reflect mitigation actions like defensible space and Class A roofs. Extending this capability to the SCS suite ensures a consistent, carrier-controlled approach to incorporating verified improvements across perils.

Built for Transparency and Human-in-the-Loop Decisioning

This enhancement reflects ZestyAI’s broader commitment to human-in-the-loop AI, where insurers remain in control of key decisions and have visibility into the data behind every score.

By combining transparency with the ability to incorporate verified updates, ZestyAI helps carriers build trust with both regulators and policyholders while ensuring model outputs remain grounded in real-world conditions.

The score adjustment capability is seamlessly integrated into the ZestyAI platform and supports a wide range of use cases, including improving product fit, optimizing inspection workflows, enhancing underwriting decisions, and ensuring rating accuracy.

The Z-HAIL™, Z-WIND™, and Z-STORM™ models are built on real-world claims data and leverage property-specific features such as roof geometry, condition, and vegetation to deliver more accurate risk insights than traditional territory-based models.

ZestyAI’s storm models are approved for use in over 20 states across the Great Plains, Midwest, and U.S. South, regions most impacted by severe convective storms, and are actively used by carriers for rating and underwriting.

ZestyAI today announced an expanded partnership with Steadily, a top-rated insurer for rental properties, to deliver advanced hail and wind risk models that enable more precise underwriting. Building on a successful rollout in 2024, Steadily is broadening its use of ZestyAI’s property-specific insights to better assess storm risk and support growth across high-exposure states.

With operations in all 50 states and $300 million in annualized gross written premium, Steadily is one of the fastest-growing insurers in the U.S.

Steadily first adopted ZestyAI’s Z-HAIL™ and Z-WIND™ models in four high SCS states. With a successful proof of concept, the company is now extending usage to additional states in the coming months.

Datha Santomieri, Co‑Founder & COO of Steadily, said:

“Expanding our use of ZestyAI’s hail and wind models reaffirms our commitment to precision and efficiency in landlord underwriting. These insights help us make informed decisions quickly and manage exposure with greater confidence.”

ZestyAI’s platform predicts the likelihood and severity of storm-related claims by analyzing how localized climatology interacts with individual property characteristics — a sharp contrast to traditional models that rely on ZIP code or territory-level assessments. Each model is built and validated on extensive real-world claims data and delivers transparent explanations of the key factors behind every risk score.

Together, Z-HAIL and Z-WIND help insurers identify storm risk at the parcel level by evaluating roof condition, structural complexity, historical losses, and local storm exposure, enabling the granularity needed to underwrite confidently in volatile regions.

“Steadily is modernizing a critical segment of the market with their customer-centric, tech-forward approach,” said Attila Toth, Founder and CEO of ZestyAI.

“We’re proud to support their growth with AI-driven insights that enable better pricing, smarter underwriting, and more resilient portfolios.”

ZestyAI’s severe convective storm models are currently approved by regulators in 19 states and used by leading insurers across the country.