#United States #Wisconsin #ZestyAI #Z-WATER #Water Risk

ZestyAI's Non-Weather Water Risk Model Approved in Wisconsin

In a groundbreaking development, ZestyAI, a leading provider of AI-driven property and climate risk analytics, has received the green light from Wisconsin regulators for its innovative non-weather water risk model known as Z-WATER™. This approval marks a significant step toward enhancing the accuracy with which insurers can assess risks associated with non-weather-related water damage, a growing concern in the homeowners' insurance sector.

Understanding Non-Weather Water Risks

Non-weather water risks have rapidly emerged as one of the most costly hazards for homeowners, now ranking as the fourth costliest peril in the insurance market. Over the past decade, claim severity related to these risks has surged by an astounding 80%, surpassing traditional catastrophes like hurricanes. Surprisingly, the losses from non-weather incidents, such as burst pipes, plumbing leaks, and appliance failures, can have an equally devastating financial impact as natural disasters. With average claims exceeding $13,000, the need for an effective assessment tool has never been more pressing.

The Z-WATER Model

Z-WATER is not just another predictive model; it is built on rigorous data analysis and real insurer loss metrics. By harnessing advanced computer vision techniques, Z-ZATER utilizes aerial imagery combined with tax assessor data, permit records, climatology science, and infrastructure insights. These innovative methods allow the model to assess crucial property-level risk factors with remarkable precision.

One of the standout features of Z-WATER is its predictive accuracy. The model is designed to forecast both the frequency and the severity of non-weather water-related claims with up to 18 times greater accuracy than traditional models that insurers have relied upon in the past. This accuracy stems from the model's sophisticated approach to understanding how various factors, such as home design, plumbing systems, and even local vegetation patterns, contribute to overall risk.

Benefits for Insurers

Following this regulatory approval, insurers in Wisconsin can harness the capabilities of Z-WATER to:

• - Establish more precise, property-specific rates: By aligning premiums with actual risks, insurers can ensure that clients are charged fairly based on their unique vulnerabilities.
• - Tailor coverage options: Insurers can now align their product offerings with the specific vulnerabilities identified by Z-WATER, enhancing customer satisfaction.
• - Optimize inspection processes: The data-driven insights provided by Z-WATER can inform more efficient inspection and mitigation strategies, including the adoption of preventative technologies like water sensors.
• - Minimize cross-subsidization: With better risk assessment, insurers can improve overall portfolio performance and reduce the burden on low-risk clients who may indirectly bear the costs of high-risk policies.

As Bryan Rehor, Director of Regulatory Strategy at ZestyAI, aptly puts it, “Non-weather water is one of the most frequent and expensive sources of loss for insurers, and it behaves differently than other perils.” This underscores the importance of Z-WATER in reshaping how insurers approach these increasingly common risks, leveraging the model's ability to capture and analyze nuanced property-level features.

A Future of Enhanced Risk Management

The approval of Z-WATER not only represents a triumph for ZestyAI but also highlights the growing trend towards using AI and data analytics to tackle the ever-evolving landscape of insurance risks. With over 70 regulatory approvals across various peril types, including wildfire, hail, wind, and now non-weather water, ZestyAI is uniquely positioned as a leader in this emerging field. Their suite of products, including the Z-PROPERTY™ solution, further reinforces the trusted insights insurers can rely upon for better decision-making.

In a world where climate change and environmental factors continue to disrupt traditional insurance models, ZestyAI's commitment to innovation brings hope for a more resilient and responsive insurance framework. By aligning underwriting practices with actual risk levels and focusing on data-driven strategies, stakeholders in the insurance industry can look forward to a healthier, more sustainable market.

With the launch of Z-WATER, ZestyAI stands at the forefront of a transformative shift in the insurance landscape, ensuring that both insurers and policyholders can navigate the complexities of water-related risks more effectively than ever before.