(Image credit: Sippakorn Yamkasikorn.)
The Berkshire Hathaway Homestate Companies (BHHC; Omaha, Neb.) has chosen Zesty.ai (Oakland, Calif.), a provider of climate risk analytics, to enhance its current understanding of climate risk for commercial properties at the individual property level, according to a vendor statement. BHHC comprises six insurance carriers that are part of the Berkshire Hathaway group of insurance companies, and through this relationship it gains immediate access to Zesty.ai’s climate risk solutions to enhance its underwriting processes. Other Berkshire Hathaway Inc. insurance affiliates will also experiment with Zesty.ai’s technology to evaluate for future use in their property business as well, according to the vendor.
Zesty.ai notes that insurance losses from secondary perils including wildfires, severe convective storms, and floods have been increasing in frequency and severity, resulting in $97 billion in insured losses in 2020 alone, according to Aon. Losses from these events are now outpacing losses from primary perils like hurricanes and earthquakes. The insurance industry has adopted more sophisticated models for primary perils while models to understand risk posed by secondary perils are still very nascent. BHHC’s partnership with Zesty.ai offers the company access to assessment of secondary perils that leverage technologies such as AI and computer vision.
“As a leading commercial property insurer, we are deeply committed to leveraging the latest technologies to ensure we are accurately pricing the risk to our customers from natural disasters,” comments Brian Hall, VP, Products and Underwriting, Berkshire Hathaway Homestate Companies. “We’ve been evaluating Zesty.ai’s climate risk solutions for over two years and have found them to be valuable in enhancing our current underwriting process.”
Over 200 Billion Data Points
Zesty.ai reports that it uses more than 200 billion data points, including aerial imagery, weather, and real estate data, to generate property-specific risk scores for both personal and commercial lines business. By combining property insights, such as roof pitch, building height, parcel slope, and more with Zesty.ai says its proprietary database of actual loss data has allowed the company to build the next generation of predictive climate risk models, including Z-FIRE, an AI model trained on more than 1,400 wildfire events and more than 20 years of historical loss data. Unlike legacy models, Z-FIRE accounts for the property-level factors that contribute to wildfire risk including building materials, historical weather data, and factors extracted from aerial imagery like vegetation, and then combines these details to derive a property-specific predictive risk score, according to the vendor.
“The Berkshire Hathaway Homestate Companies have a longstanding reputation for being innovators in the industry, and we’re honored to work with them to enhance their ability to accurately assess climate risk,” comments Attila Toth, CEO, Zesty.ai. “Their understanding of commercial property insurance combined with our AI-powered climate risk analytics will drive substantial value for their customers while giving BHHC a true edge in risk selection.”