Image credit: Screengrab from AM Best TV’s interview with Sarah Kennedy of Kettle
Sarah Kennedy (pictured), insurance vice president at insurtech managing general agent Kettle, believes the parametric wildfire insurance space is a growth market, albeit a tricky one.
Speaking with AM Best TV at the 2024 Target Markets Program Administrators Association Mid-Year Meeting in Florida, Kennedy cited the growing demand for a parametric wildfire product, particularly in California where there has been an exodus of carriers.
“There’s more and more demand, definitely,” she said. “In California, it’s tricky because it can be used one of two ways for the most part. One is as a deductible buy-down. So, if an insured has a very high deductible, they’re able to buy the parametric as a primary insurance, almost.
“The other way is, if a carrier can exclude wildfire, the parametric can be brought in to cover the wildfire. California has an old law that states that you can exclude fire, but they don’t state that you can exclude wildfire. So, it’s a bit tricky. Some carriers do it; some are not comfortable with it. It’s just a tricky space to be in.”
When asked whether she sees the market as one that is poised for growth, Kennedy stressed “for sure” to express agreement, adding that more homes are actually being built in areas that are exposed to wildfire risk.
“We work mostly in California,” she told AM Best TV. “There’s a lot of admitted carriers that are exiting the space due to not being able to get the rates that they need for the coverage. We find opportunities there to step in and help those insureds. We have a parametric wildfire product that is great in those areas.
“The challenge with a lot of companies is that the wildfire models that are out in the market are not advanced. We do have our own proprietary model, so we kind of have a step up from everybody else. There’s a lot of growth that could be done in those models.”
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