Uncovering Catastrophic Climate Risks with Big Data and AI

Table of Contents

1. Introduction
2. Understanding Property Risk
   1. Residential and Commercial Properties
   2. Focus on Catastrophic Loss Areas
      • Wildfires
      • Hailstorms
3. The Role of Data in Property Risk Analysis
   1. Science-Based Models vs. Big Data
   2. Utilizing Visual and Multi-spectral Data
   3. Data Sources and Technologies Used
4. Analyzing the Data: Assessing Property Risk
   1. Analyzing Individual Properties
   2. Factors Studied for Property Risk Assessment
      • 3D Analysis
      • Vegetation and Secondary Structures
      • Density and Topography
5. Case Studies: Understanding Property Losses
   1. Analyzing Wildfire Losses in California
   2. Impact of Global Warming
6. Portfolio Management and Risk Modeling
   1. Incorporating Spatial Statistics
   2. Dealing with Common Shocks and Correlations
7. Insurance Considerations and Externalities
   1. Impact on Insurance Costs
   2. Dealing with Unavoidable Externalities
8. Expansion and Future Plans
   1. Working with European Companies
   2. Continuous Research and Model Improvement

Understanding Property Risk with Zesty AI

In today's world, property risk is a crucial concern for both residential and commercial properties. One company that specializes in helping people understand property risks, particularly catastrophic losses, is Zesty AI. Their primary focus is on analyzing risk factors such as wildfires and hailstorms, utilizing big data and advanced technologies to provide insights to their clients in the insurance and housing industries.

Introduction

Zesty AI is revolutionizing the way we understand and analyze property risk. With a specific focus on catastrophic loss areas, they aim to provide accurate and comprehensive risk assessments at an individual property level. By leveraging big data and advanced analytics, Zesty AI is changing the game for risk management.

Understanding Property Risk

Residential and Commercial Properties

Zesty AI's analysis covers both residential and commercial properties. By examining the unique risks associated with each Type of property, they can provide tailored insights to their clients. Whether it's a single-family home or a large commercial building, Zesty AI's methodologies encompass the diverse range of property risks.

Focus on Catastrophic Loss Areas

Zesty AI places particular emphasis on catastrophic loss areas, where the impact of natural disasters can be severe. Wildfires, such as the devastating ones experienced in California, are a significant concern. With the increase in wildfire frequency and intensity, understanding the risks associated with these events is crucial. Additionally, hailstorms pose a significant threat to residential properties in the United States. Zesty AI recognizes the importance of addressing these risks to ensure the safety and protection of properties.

The Role of Data in Property Risk Analysis

Traditionally, risk assessments relied on science-based models and first principle models, which had limitations when it came to modeling non-linear events like hurricanes, fires, floods, and hailstorms. However, Zesty AI is revolutionizing the field by utilizing big data.

Science-Based Models vs. Big Data

By leveraging big data from multiple sources, Zesty AI can analyze vast amounts of information to gain a better understanding of property risks. This approach surpasses the limitations of traditional models and enables more accurate predictions. With access to comprehensive data sets, Zesty AI can provide insights that were previously unattainable.

Utilizing Visual and Multi-spectral Data

Zesty AI goes beyond traditional data sources like building permits and incorporates visual and multi-spectral data. This includes data collected from airplanes, low-earth orbit satellites, and drones. By processing this data in the cloud and utilizing AI-based data science technologies, Zesty AI gains valuable insights into individual properties. This approach allows for a more nuanced understanding of risks and enables targeted risk management strategies.

Data Sources and Technologies Used

Zesty AI leverages all major cloud platforms and keeps up-to-date with the latest advancements in deep learning and machine learning. They work with various data sources, including optical, LiDAR, and weather data. With over 100 million properties analyzed in the United States alone, Zesty AI has a wealth of data at their disposal to inform their risk assessments accurately.

Analyzing the Data: Assessing Property Risk

Zesty AI's approach to risk analysis involves a detailed examination of individual properties and their specific characteristics. By considering various factors, they can accurately assess the risks associated with each property.

Analyzing Individual Properties

Zesty AI analyzes individual properties by using deep learning algorithms to process optical, airplane, and satellite imagery. This allows them to determine key characteristics such as the Shape and area of the roof, the presence of secondary structures, and the density of vegetation surrounding the property. By considering these factors, Zesty AI can understand the unique risks associated with each property.

Factors Studied for Property Risk Assessment

1. 3D Analysis: Zesty AI takes AdVantage of digital surface modeling (DSM) data to analyze the Height and structure of properties in 3D. This information provides insights into factors like roof pitch and the presence of overhanging trees or structures that may impact property risk.

2. Vegetation and Secondary Structures: Zesty AI examines the vegetation surrounding a property to determine its influence on property risk. They also consider the presence of secondary structures nearby, as their proximity can affect the spread of hazards such as fire.

3. Density and Topography: Understanding the density of houses in a neighborhood and the topography of the surrounding area is crucial for assessing property risk. Zesty AI takes into account these factors to provide comprehensive risk analyses.

By conducting these detailed analyses, Zesty AI can accurately identify and assess the risks associated with individual properties and provide actionable insights for risk mitigation and management strategies.

Case Studies: Understanding Property Losses

To demonstrate the effectiveness of their approach, Zesty AI has conducted case studies that shed light on the impact of property losses caused by catastrophic events. By analyzing data from multiple sources, they have gained valuable insights into past events, such as wildfires in California.

Analyzing Wildfire Losses in California

California is renowned for its wildfires, which have caused significant property damage and loss in recent years. Zesty AI has analyzed over 1,200 wildfire events and has a comprehensive understanding of the losses incurred. By combining data on the exact size and characteristics of properties with data on the extent and severity of wildfires, Zesty AI can accurately assess the risks and predict the impact of future events.

Impact of Global Warming

Zesty AI acknowledges the role of global warming in the increasing frequency and severity of catastrophic events. By utilizing the freshest and most up-to-date data, Zesty AI implicitly takes into account the effects of global warming in their risk assessments. This allows for a more accurate understanding of future risks.

Portfolio Management and Risk Modeling

Zesty AI recognizes the importance of portfolio management and risk modeling for insurance companies and other stakeholders in the industry. By incorporating spatial statistics and analyzing correlations between different properties, they ensure that their models accurately represent real-world scenarios.

Incorporating Spatial Statistics

Spatial statistics play a crucial role in Zesty AI's risk modeling process. By analyzing the geographical distribution of properties and considering factors like proximity to forests or other high-risk areas, they can provide more accurate risk assessments.

Dealing with Common Shocks and Correlations

Another aspect of risk modeling that Zesty AI focuses on is managing common shocks and correlations. By identifying and accounting for the interdependencies between properties, they ensure that insurers and other stakeholders are not left with unexpected higher risks on their books.

Insurance Considerations and Externalities

Zesty AI's risk assessments have implications on insurance costs and dealing with externalities. These considerations are essential for addressing potential inequalities in insurance costs and managing the shared risks between neighboring properties.

Impact on Insurance Costs

Zesty AI's risk assessments provide insurers with a more accurate understanding of the risks associated with individual properties. This allows insurers to determine appropriate insurance rates. However, it is crucial to strike a balance to ensure that insurance costs remain fair and reasonable for all property owners.

Dealing with Unavoidable Externalities

Inevitably, external factors beyond an individual property owner's control can impact their risk and insurance costs. Zesty AI recognizes the challenges associated with unavoidable externalities, such as neighboring properties increasing risks. They aim to work with insurers and other stakeholders to find solutions that address these challenges and promote fairness.

Expansion and Future Plans

Zesty AI's Current focus is primarily on serving clients in the United States market. However, they have plans for expansion in the near future. They aim to work with European companies and expand their services to cover all of North America. Additionally, Zesty AI's commitment to continuous research and model improvement ensures that they stay at the forefront of property risk analysis.

As Zesty AI continues to refine their methods and leverage the power of big data and advanced analytics, they are poised to revolutionize the property risk analysis landscape worldwide.

Highlights

• Zesty AI utilizes big data and advanced analytics to understand and analyze property risk.
• They focus on catastrophic loss areas such as wildfires and hailstorms.
• Traditional science-based models are replaced by data-driven models using visual and multi-spectral data.
• Zesty AI's risk assessments provide accurate insights into individual properties, considering factors like 3D analysis, vegetation, and density.
• Data on past events, like wildfires in California, are used to predict future risks.
• Portfolio management and risk modeling are crucial components of Zesty AI's approach.
• Insurance costs and externalities are taken into account to ensure fairness and mitigate inequalities.
• Zesty AI has plans for expansion, aiming to serve clients in Europe and all of North America.

FAQ

Q: How accurate are Zesty AI's risk assessments?

A: Zesty AI's risk assessments are highly accurate due to their utilization of big data and advanced analytics. The analysis of visual and multi-spectral data provides comprehensive insights into individual properties, allowing for precise risk assessment.

Q: Can Zesty AI predict specific events like hailstorms?

A: While Zesty AI's risk assessments can predict the likelihood of hailstorms occurring at a location, they do not provide real-time predictions for specific events. Instead, they offer insights into the general risk level of a property, allowing property owners to take appropriate precautions.

Q: Does Zesty AI take into account the impact of global warming?

A: Yes, Zesty AI implicitly considers the impact of global warming by utilizing the freshest and most up-to-date data available. This allows for a more accurate understanding of future risks associated with catastrophic events like wildfires.

Q: How does Zesty AI ensure fairness in insurance costs?

A: Zesty AI recognizes the importance of fairness in insurance costs. While their risk assessments provide insurers with accurate insights into property risks, they aim to strike a balance that ensures reasonable insurance costs for all property owners. They work with insurers to find solutions that address potential inequalities and promote fairness.

Q: Does Zesty AI offer its services outside the United States?

A: Currently, Zesty AI primarily serves clients in the United States. However, they have plans for expansion and aim to work with European companies in the near future. They also have plans to expand their services to cover all of North America.