A 360-Degree View of Risk

We're clearly in an environment where the insurance industry is increasingly perplexed by the challenge of natural disasters and climate change. What Green Shield aspires to do is build new solutions to meet that need. Where other people see obstacles that are tough to break through, Green Shield is really working very diligently to figure out ways to push them aside. I love the energy that comes with being surgically focused on a mission that's disruptive.

There’s no question that we live in a world of heavier rain, more severe drought, rising water levels, colder temperatures, hotter temperatures – these all add up to a level of activity that is not only more frequent, but is more violent. You don't need to be an actuary to understand that.

Then what we've seen economically in terms of the dynamic nature of material costs, and labor costs and construction costs to replace damaged or lost structures only elevates the problem. And that issue becomes even more problematic when you're dealing with a large-scale event.

Catastrophes, as we talk about in the insurance space, have all the natural dynamics but then there’s the collateral influence of inflation, and cost creep, and it makes it a really complicated issue for the industry. I think the industry feels at times like it’s constrained in its ability to accurately charge for all of those elements. It becomes a bit of a vicious cycle.

Property owners are quick to dismiss the growing body of evidence that it's not a matter of if but when you and/or your property will be directly affected by some kind of a catastrophe event. Property owners need to understand the realities of their risks and they also need to be actively participating in defending what they own and care about. If I, as a risk management technician, care more about protecting their property, there's some kind of imbalance to the equation.

A historical pain point has been this seemingly endless reliance on what I would describe as antiquated techniques for evaluating exposure to a natural disaster at the property level. My experience too often has been that underwriters are viewing entire geographies as being off limits to their underwriting appetite. Or a property is deemed uninsurable based exclusively on a risk score that doesn’t shed any light on how it was formulated. It's a number, and as a consequence of that number the property has been deemed uninsurable – the carrier has made the decision from an underwriting standpoint to move on.

In essence, the industry is using scores and models more broadly to really avoid risk and not manage it. And I think that's where Green Shield is trying to change the paradigm. There's so much granular, impactful data to be able to tap into to draw more insightful conclusions from.

Green Shield is very assertive about our desire to lead with risk mitigation and risk transparency. We are first and foremost developing the insight tools that modern cat underwriting requires and we're bringing those into the broader property casualty marketplace – not just for our own advantage, but for the advantage of the marketplace more broadly.

We will be offering our skills and capabilities to not just our underwriting team, but eventually to people who are anxious to have a better understanding of how to underwrite property, no matter who they're affiliated with.

In the meantime, Green Shield has established a wholesale operation that connects retail agents who have hard-to-place property locations with markets that remain committed to those kinds of risks. And we're also actively working on creating our own capacity to help those homeowners in disaster prone parts of the country to secure coverage.

But at the heart of all of that is the ability to interpret real risk and prescribe preventative measures in an in-depth way that that nobody else can. We believe that insights – a deep level of insights – are essential to better underwriting. And our special sauce is the ability to coalesce around an opinion or a view of risk based on the interpretation of the data that we collect by people who are experts in the space that we're examining.

We are tapping into resources in this space that are not typically utilized. That's particularly acute for wildfire, which is a challenging thing to understand and to predict where it may go based on characteristics.

We are knee deep in that process, trying to develop from a logical perspective and from a data perspective how to best position ourselves to be able to accomplish just that. To be able to not just track the dynamics on the ground, but also understand how those dynamics will influence the direction of the wildfire and therefore, how do we stay ahead of it? And how do we keep our clients apprised? And how do we know or assure them that something may or may not come their way?

By aspiring to get down to the property level – that's the that's the trick. If we can get those insights, we can then create a prescriptive collaborative approach to properties and promote the likelihood that they will survive whatever they are exposed to.

That practicality lends itself to being taken seriously by the property owner and getting the property owner to proactively engage and prepare. We will shed light not only on what needs to be fixed, but we'll also take this a step further and offer suggestions on just exactly how to fix them and reduce the risk to everybody's satisfaction.