Farmers Insurance plans to use artificial intelligence developed by
Before employing Zesty’s platform, Farmers says it could not cover homes in some areas of the state due to
“Using Zesty in our decision tree will allow us to get down to a property level that will open up the market for us,” Daly explains. “This is about adding [insurable areas] to the pie. Most carriers in the state of California, over the last decade, have done far more restricting, us included. And now we can open up the market.”
Farmers Insurance uses the Fireline platform from Verisk to measure fire risk in an area by assigning the region a rank on a scale of one to 30. In any area classified higher than level three, the properties are too high of a risk to insure. Now, Farmers Insurance runs the properties just outside of the acceptable risk range through the Zesty technology to find out if the risk profile should be that high. As a result, approximately 30,000 new properties are now eligible for insurance, according to Daly.
Zesty, an Oakland-based start-up, is local to the same area as Farmers Insurance, so the insurance company has been aware of the technology for a while. The two companies have been in talks for a few years. It measures wildfire risk in a more sophisticated way, by measuring the factors of vegetation, roof type or construction materials.
"Zesty.ai's work with Farmers to successfully implement the latest AI technology to accurately assess the risk of wildfires is another step forward in managing a problem that has claimed 194 lives and drove $57 billion in economic losses over the past five years in California," said Attila Toth, founder and CEO of Zesty.ai, in a statement. "We are proud that this partnership expands access to essential insurance coverage for many Californians to help protect their livelihoods and communities from natural disasters."
Farmers announced on June 14 that it had been granted approval by the California Department of Insurance to use Zesty’s technology for this purpose. The company also had dialogues with consumer watchdogs about the usage of the tool, according to Daly.
“Commissioner [Ricardo] Lara has been quite vocal about the desire for carriers to use technology and be innovative, to try to solve some of the challenges in California,” says Daly. “Wildfire availability, or coverage availability for wildfire is one of his top priorities. So it was really just working with the department on saying, ‘Hey, this is a solution that we think fits what your desires are, it opens up risks that get them out of the California FAIR plan,’” a state program for high-fire-risk properties, he explains.
