Verisk’s wildfire model under review in California

Verisk has submitted its wildfire catastrophe model for review by the California Department of Insurance (CDI), marking the first such submission under the state’s new regulation allowing catastrophe models in insurance ratemaking.

This move follows California Insurance Commissioner Ricardo Lara’s Sustainable Insurance Strategy, aimed at improving insurance availability amid rising wildfire risks.

Verisk’s Wildfire Model incorporates hazard, vulnerability, and risk trends, helping insurers assess wildfire exposure more accurately. The CDI’s review process will determine the model’s compliance with Proposition 103, potentially shaping future underwriting and pricing strategies in California’s property insurance market.

“We’re proud to be the first catastrophe modeler to work with the California Department of Insurance to offer a modeled assessment of wildfire risk and to help bring stability to the insurance market. This is a pivotal moment for California’s insurance market, one that promises improved resilience and stability for providers and potential insureds.” – Rob Newbold, president of Extreme Event Solutions at Verisk.