Willis places $2.5 million California wildfire resilience policy with Globe Underwriting

By Rebecca Delaney

April 2 - (The Insurer) - Willis has structured a $2.5 million wildfire resilience insurance policy for Tahoe Donner Association, a private homeowners association in northern California, that takes into account efforts to mitigate fire risk when setting premiums and deductibles.

The parametric policy is placed with Globe Underwriting, formerly Forest Re.

Developed in partnership with The Nature Conservancy and the Center for Law, Energy and the Environment (CLEE) at the University of California, Berkeley, Willis said the policy is intended to reduce premium pricing and improve availability where ecological forest practices have taken place.

Techniques include tree thinning to improve the health and growth of remaining trees, and planned fires to clear out flammable vegetation.

Tahoe Donner has completed forest management projects over 1,520 acres since 2015.

The new policy, which covers 1,345 acres of Tahoe Donner’s forested and recreation land, has a 39% lower premium and 89% lower deductible than would have been the case without nature-based forest management, said Willis.

Willis added that as insurers increasingly decline to write and renew insurance in California and other states in response to rising wildfire risks and claims costs, the nature-based solution provides an "urgently needed approach" to managing wildfire risk.

"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," explained David Williams, associate director of alternative risk transfer solutions at Willis.

"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."

Dave Jones, director of the climate risk initiative at CLEE and a former California insurance commissioner, added: "The improved price and availability of this pioneering insurance policy demonstrate that home and business insurers can and should renew and write property insurance in California and elsewhere in the U.S. where forest treatment is undertaken."