Thought the recent Southern California wildfire outside the city of Glendora is largely contained and the allegedly responsible parties are heading to court, the risk of wildfire in the warm, dry, and heavily populated state is especially high this year. Insurance & Technology reached out to Mercury Insurance to ask how it is preparing for the peril.
Insurance & Technology: How does Mercury model wildfire risk? Is it something you expect to impact insured homes regularly, or are events this serious somewhat rare?
Charles Toney, VP, Actuarial Services: Mercury uses an engineering model from a AIR to model wildfire risk. The model suggests we should expect significant fire losses on an annual basis, especially in California. Our wildfire risk has increased over the past several years as the number of homeowners policies we've written has increased.
Insurance & Technology: What technology in the claims department are you using to respond to these events? How do you reach customers who may have evacuated, for example?
Earl Williams, Divisional Claims Manager: Mercury typically monitors activities at the evacuation centers, news reports and claims received through our claims hotline. Once a customer has filed a claim our emergency response team contacts the customer to begin providing assistance. If there is significant activity at evacuation centers then we will typically set up operations at the center. We also may in some cases reach out directly to customers who we know suffered a loss to help them with the claim and even arrange for temporary living arrangements.
Insurance & Technology: In the case that policyholders have been evacuated, do you use any sort of aerial/satellite imagery to identify potentially damaged structures before they know about them?
Williams: Mercury doesn't use satellite imagery, but we do work with a third party vendor that provides updates on the event, areas impacted and emergency services reports. As the event develops we are constantly analyzing the event area to determine how many policyholders may be affected based upon ZIP codes.