The following statement from the American Property Casualty Insurance Association (APCIA) is in response to a new workshop announced by the California Department of Insurance (CDI) to examine the use of catastrophe modeling in rate making. This statement can be attributed to Mark Sektnan, APCIA vice president for state government relations.
“We are pleased to see the CDI continue their work to explore the benefits of catastrophe models, including how forward-looking models can be used to better assess increasing risks caused by climate change and drier conditions.
“California is a top insurance market and insurers are committed to the Golden State. Incorporating the use of catastrophe modeling would give insurers the modern tools needed to better assess and reflect growing catastrophic wildfire risk and the rising costs of claims and inflation in rate-making. This workshop will provide an important opportunity to demonstrate how catastrophe models in the rating process can serve as a key solution to help restore stability in the California insurance market.
“We look forward to working with CDI and policymakers to find solutions. This includes expanding the mitigation of properties against ember intrusion to help bend down the loss curve and modernizing California’s rate making process, which should help improve consumer choice and ensure consumers keep access to the insurance coverage they need.”