Hiscox and Bellwether Collaborate on Wildfire Risk Modelling
Global specialist insurer Hiscox has entered into a partnership with Bellwether, a team from Alphabet’s X, formerly Google X, to support more refined wildfire risk modelling in California. The collaboration aims to improve insurance availability for homeowners in regions increasingly affected by wildfires.
The partnership involves integrating Bellwether’s artificial intelligence-powered wildfire prediction system with Hiscox London Market’s existing underwriting framework. This integration enhances the assessment of wildfire exposure and supports pricing decisions by combining the model with third-party tools and Hiscox’s internal analytics.
Bellwether’s tool utilizes geospatial data, environmental conditions, and infrastructure-related information to estimate wildfire risk. It incorporates thousands of data points, such as vegetation type, wind speed, topography, and proximity to roads or utilities, to produce location-specific risk scores. According to the companies, this model is currently the only one capable of forecasting wildfire risk up to five years ahead and providing transparency about the specific factors driving each score.
The addition of this model enables Hiscox to make more informed underwriting decisions in California, where some insurers have scaled back due to the growing frequency and cost of wildfire-related claims. By improving risk differentiation, Hiscox aims to continue offering cover in areas where other insurers have withdrawn or imposed restrictions.
James Brady, property divisional director at Hiscox London Market, stated that the combined modelling approach supports a more sustainable insurance strategy in wildfire-prone areas. This helps the firm quantify risk with greater precision and extend coverage to more homeowners.
Sarah Russell of Bellwether said the partnership demonstrates the potential of AI and geospatial data in addressing the insurance challenges associated with extreme weather. She added that Bellwether’s modelling is designed to support organisations responding to evolving environmental risks.
Wildfire risk has become a significant concern in the California insurance market, with insurers facing rising claims costs and increased scrutiny from state regulators over rate filings and policy availability. Several major carriers have paused or scaled back new business in high-risk areas, citing limitations in modelling accuracy and the unpredictability of extreme events.
California’s Department of Insurance has been exploring reforms aimed at allowing insurers to incorporate forward-looking catastrophe models into rate-setting. This has opened the door for innovations such as the Bellwether model to play a greater role in underwriting decisions.
The Hiscox-Bellwether partnership reflects a broader industry trend toward integrating advanced data analytics and climate models into insurance operations. Such efforts aim to support market stability and maintain homeowner access to insurance in regions where traditional methods of assessing risk are no longer sufficient.
