California’s insurance market is a masterclass in volatility. Wildfires, landslides, and earthquakes have rendered the state one of the most challenging environments for insurers, driving up claims and destabilizing bottom lines. Some carriers have responded by retreating entirely, while others have tightened underwriting to the point of near-inaccessibility.
United Fire Group (UFG) Insurance, however, is charting a different course - one grounded in diversification, technology, and careful risk management.
“We are a national carrier, and California is one of our biggest states, alongside Texas and Florida,” said Clan Salazar, vice president of specialty at UFG. “All three represent the largest states in terms of premium - but also the most challenges.”
Rather than pulling back, UFG has opted for a strategy of spreading its exposure across geographies and business lines. The goal: to remain competitive in high-risk areas without jeopardizing the company’s long-term stability.
A key part of that approach involves a disciplined underwriting strategy. Once heavily invested in wildfire coverage, UFG reassessed when the market shifted. “We used to write a significant amount of wildfire exposure,” Salazar explained. “But when the market dynamics changed, we stepped back.” Exiting when premiums no longer justified the risk may have spared UFG from deeper losses as conditions worsened.
At the same time, UFG has embraced technology to navigate this turbulent landscape. Advanced catastrophe modeling, in particular, has reshaped the company’s ability to assess risk. “We’ve improved data capture and integrated new CAT modeling tools, allowing us to better analyze exposure and decide where we want to grow,” Salazar said. The models blend internal company data with industry benchmarks, offering underwriters sharper insights into potential vulnerabilities.
Still, technology is no silver bullet. “Technology is a tool, not a solution in itself,” Salazar cautioned. At UFG Specialty, data-driven models are used in tandem with human expertise. “We rely heavily on the judgment of our people,” he added, emphasizing the nuanced decisions that experienced underwriters bring to the table.
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But retaining that expertise poses its own challenge. Like much of the industry, UFG is facing a generational shift, with veteran underwriters nearing retirement and younger professionals stepping in. Bridging the knowledge gap is critical. “We have a lot of younger people hungry to learn, but we also need to pass on the knowledge from our experienced team,” Salazar noted. To address this, UFG invests in mentorship and training programs, ensuring new underwriters are not only fluent in technology but also equipped to apply sound judgment.
Education doesn’t stop within the company. UFG also prioritizes outreach to brokers and clients, particularly as more businesses find themselves moving from standard insurance markets to the excess and surplus (E&S) space. The shift can be jarring, especially for clients unfamiliar with the process. “We see clients who’ve never dealt with E&S before,” Salazar said. “Brokers are essential in helping them understand why their business is moving out of the standard market.”
In such cases, brokers act as critical translators - explaining rising premiums, tighter underwriting, and the new realities of risk transfer.
Even amid heightened competition, Salazar sees opportunity. The E&S market is drawing fresh capacity and new MGAs, offering an influx of products and underwriting talent. Yet, UFG remains cautious. “There’s more capacity, but it will weed out situations where losses can’t be absorbed,” he observed, underscoring the need for disciplined underwriting in a crowded field.
For UFG, survival isn’t about fleeing risk - it’s about recalibrating strategy, investing in people, and embracing the tools needed to stay nimble. In California’s increasingly precarious insurance market, that blend of grit and foresight may prove the ultimate competitive advantage.
