Willis’ new wildfire resilience insurance to focus on risk mitigation

Willis, a business of WTW, and The Nature Conservancy (TNC) have launched a new $2.5 million wildfire resilience insurance for the Tahoe Donner Association in Truckee, California.

Described as “first-of-its-kind,” this policy directly links insurance costs to proactive wildfire risk mitigation efforts.

Developed in partnership with UC Berkeley’s Center for Law, Energy and the Environment (CLEE), the policy aims to demonstrate how ecological forest management practices can lead to reduced premiums and increased insurance availability.

Such techniques include tree thinning to improve the health and growth of the remaining trees and planned fires to clear out flammable vegetation, both proven to reduce wildfire risk and make forests healthier. Tahoe Donner has completed forest management projects over 1,520 acres since 2015.

Kristen Wilson, Lead Forest Scientist, The Nature Conservancy in California, commented: “By placing this innovative insurance product, we hope to inspire other insurance underwriters to account for the benefit of thinning and prescribed fire and increase the implementation of this type of work more broadly.”

Insurance policies written in areas benefiting from forest treatment have previously not accounted for risk reduction from forest fire mitigation, WTW notes.

WTW notes that traditional insurance policies in areas benefiting from forest treatment haven’t typically factored in the risk reduction achieved through mitigation.

This new policy, covering 1,345 acres of Tahoe Donner’s land, secures a 39% lower premium and an 89% lower deductible than would have been possible without the nature-based forest management.

With California’s wildfire crisis pressures the state’s insurance industry. David Williams, Associate Director, Alternative Risk Transfer Solutions, Willis, said: “The forest management work completed by Tahoe Donner, by removing fuel that could burn and leading to a lower fire risk, has considerably reduced the premium and deductible in this insurance policy.

“At a pivotal moment for California’s insurance market, Willis has worked across the industry to bring this solution to Tahoe Donner, placing the insurance with Globe Underwriting, in a positive step towards a more resilient and sustainable insurance industry.”

Globe Underwriting (formerly Forest Re) is internationally recognised for excellence in forestry risk assessment and profiling and provided the essential empirical analysis to support the premium and deductible reduction.

The announcement comes as insurance companies are non-renewing policies for thousands of Californians, including those affected by wildfires.

Thousands of residents in the Pacific Palisades had their insurance non-renewed just weeks before the devastating Los Angeles wildfires. Hundreds of thousands of homeowners throughout California have had their insurance non-renewed over the last five years.

This has driven a dramatic surge in policies under California’s FAIR Plan, the state-backed insurer of last resort, which saw residential policies increase by 123% between September 2020 and September 2024, largely due to wildfire risk.

This website states: The content on this site is sourced from the internet. If there is any infringement, please contact us and we will handle it promptly.