CoreLogic wins analytics solution of the year for developing an innovative wildfire risk management tool that enables insurers to better manage and mitigate this increasing threat.
Discussion and education surrounding wildfire peril has drastically increased in recent years, particularly following catastrophic losses in North America in 2017 and 2018.
California, being a highly wildfire risk prone state, has led this focus and in 2023 the California Department of Insurance enacted a new set of requirements for insurers that operate in the state. These new requirements mandate that insurers incorporate 12 specific mitigation factors in their rating plans.
The complexity of adding all 12 factors into rating systems prompted CoreLogic to establish the Wildfire Mitigation Score – a comprehensive risk score on a scale of 0.1 to 100 that evaluates a property based on the wildfire mitigation actions taken by owners.
InsuranceERM's judges were impressed how CoreLogic developed the wildfire risk tool, despite a tight timeline of just 180 days and a lack of readily available data.
A spokesperson for CoreLogic tells InsuranceERM: "By developing the Wildfire Mitigation Score and identifying 12 mitigation factors, we have leveraged artificial intelligence (AI) and machine learning (ML) to prefill these factors as specified by the California Department of Insurance."
Moving forward, CoreLogic says it aims to expand the creation of AI and ML models for advanced object detection and classification in order to provide insurers with comprehensive data at the point of sale.
"The data captured by these models will encompass details about a location's structure, property, and community-level characteristics. Ultimately, this approach enables carriers to evaluate mitigating actions that may reduce a property's risk, thereby aligning more closely with insurers' risk appetite and considerations when issuing new policies or renewing existing ones," says the spokesperson.
The judging panel described CoreLogic's tool as a "compelling and relevant response to regulatory change".
