Modernizing Homeowners Rate Plans in the Age of Changing Risk

Modernizing Homeowners Rate Plans in the Age of Changing Risk

© 2024 ZestyAI, Inc.

Discover How Risk Models Can Improve Segmentation

"Risk models that utilize property level characteristics can produce more granular risk segmentation than traditional risk group definitions, especially for weather perils where location, surrounding conditions, and property features are important components affecting the frequency and severity of claims."

  • Presenting important considerations when managing exposure to hail risk

Milliman analyzes 

ZestyAI's Z-HAIL model

  • Improving risk segmentation and pricing sophistication

Milliman White Paper

Outlining a case study about ZestyAI's Z-HAIL model

  • As catastrophic weather events continue to increase in frequency and severity, insurers need new tools to better manage risk.

    The increase in frequency and severity of catastrophic weather events creates challenges for the insurance industry, which have been made even worse by rising rebuilding costs and soaring reinsurance costs.

  • This paper explores methods of insurance companies to modernize their homeowners rate plans by:

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Respond to Climate Risks

"For companies looking to better respond to changing climate risks and emerging risks, utilizing a risk score or other insurance pricing sophistication techniques may enable an insurance company to better understand, measure, and price risk.”

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Milliman's analysis showed that over a period of seven years, properties with a Z-HAIL score of 10 had a claim frequency of 42% compared to only 2% for properties with a Z-HAIL score of 1. 

That is a difference of 21X.