High-Coverage Limits Maintained
The devastating wildfires of Labor Day 2020 still reverberate today. Detroit, Gates, Idanha, Lyons, Molalla, Phoenix, Talent, and Mill City were among the cities impacted by the horrific fires. CIS stood with them during these difficult times, covering millions of dollars of damage. That year, CIS had 54 structures damaged. As a result of these losses — and concerns about future wildfires — our property reinsurers raised premiums by 30% (approx. $2 million).
“Wildfires are now our biggest catastrophic risk,” said CIS Executive Director Patrick Priest. “This past year, our risk management consultants worked hard to protect members from this growing risk.”
CIS is addressing this issue by working directly with members statewide on wildfire risk assessments. “The first step was to utilize data analytics to identify CIS-assessed properties with the highest risks,” said Patrick. “Once we had that data, we worked with counties and cities on ways to reduce the risk.”
CIS Risk Management Consultants spent countless hours inspecting properties over the summer using the following criteria:
CIS Risk Information Manager Trent McGath created a project to map featuring CIS members’ property schedules with wildfire high-hazard zones.
This helped the CIS team prioritize risk management efforts such as establishing 100-foot safety zones in high-risk areas.
Click to expand image.
Risk Management Consultants inspected all high-risk buildings in wildfire-prone areas
International reinsurers appreciate proactive assessments
Standing with cities and counties to help make them safer, stronger, and healthier
CIS Senior Risk Management Consultant Laurie Olson, who covers Southern Oregon, was most surprised to find that members thought they were better prepared than they were.
“They didn’t realize that they didn’t have smoke or CO detectors, alarms or fire extinguishers — when they assumed they did,” she said. “This was a good opportunity to add these in their buildings.”
As part of the assessments, CIS Risk Management Consultants inspected:
The assessments revealed that several members could benefit from pruning trees away from structures — as well as cleaning up pine needles, pinecones, and leaves — to improve their defensible spaces.
CIS members may be unaware that disastrous exposures like the 2020 fires are backed by international reinsurers who continue to look closely at wildfire risks.
Patrick and CIS Property/Casualty Trust Director Scott Moss marketed CIS’ property program to reinsurers both domestically and at Lloyd’s of London. Current and prospective reinsurers came away impressed by CIS’ proactive risk management initiatives.
“No one carrier accepts these catastrophic risks alone,” said Patrick. “So, we work with our brokers to piece together a patchwork of over a dozen companies to back the CIS program.”
The wildfire assessments paid off with CIS being able to maintain high-coverage limits.
More than any other CIS program, our property coverage relies on strong partnerships with our reinsurers.
“Over half of members’ contributions to the property program is a pass-through of the costs to secure reinsurance coverage,” said Patrick. “In turn, the reinsurers stand ready to pay for the catastrophic claims we all hope never come to pass — up to $600 million.”
2021-22 Property Program Structure
Reinsurers appreciated the wildfire risk assessments and CIS’ Risk Management Consultants also found the process valuable.
“It was rewarding to go out and work with members on the assessments, helping to find ways in which to make their facilities safer and provide awareness for wildfire mitigation,” said CIS Risk Management Supervisor Katie Durfee. “The process opened some good conversations about how improvements could be made towards emergency and wildfire preparedness.”
Patrick appreciated the time members took to participate in each assessment — and for the steps they have taken to reduce the risk. “We know that many are still recovering from the wildfires from the past couple of years,” said Patrick. “We extend our heartfelt hope that they make a full recovery. Our commitment is to help mitigate future risk, but also to be there during difficult times — just like family.”
Prescribed Fire, Malheur National Forest. Image courtesy of U.S. Dept. of the Interior
