Wildfire Risk Assessment - Case Studies

Explore the San Francisco North Bay Fires of 2020 - This case study showcases the initial risk ratings at the start of the year contrasted with the actual fire locations. Navigate through the roll bar to scroll back and forth, observing the landscape-level risk. Utilizing the capabilities of ArcGIS, you can click on specific blocks to zoom in and examine data at the census block level, or view information for entire counties including Sonoma, Napa, Mendocino, Solano, and Yolo counties. 

ArcGIS Interactive Map for 5 Counties in the San Francisco North Bay

Case Studies for Utilities & Power Companies

Enhancing Utilities Resilience & Mitigation - A Case Study of San Diego County - Published in June 2023.

This case study delves into the identification of risks within the region and its correlation with income levels and property values. The landing page offers a comprehensive view of wildfire risk delineated by zip code and Wildland-Urban Interface (WUI) blocks, which coincide with census blocks. Users can interact with the data by clicking on individual bubbles or selecting multiple areas to uncover intersections between high-risk zones and areas of poverty, or to identify regions with the highest property values alongside high wildfire risk.

The "Wildfire to Power Substation" tab provides insights into wildfire risk within WUI blocks where substations are located, offering a focused perspective on critical infrastructure vulnerability.

For further insights on how utilities are leveraging these maps to enhance operational procedures and prioritize mitigation efforts, don't hesitate to reach out for additional details.

Interactive Case Study for San Diego

Case Studies for Communities

Laguna Niguel Wildfire

Published in late May 2022, this case study explores a wildfire incident that occurred in Orange County, specifically in the area of Laguna Niguel. This example was analyzed using an early version of Athena's model. As of early 2024, there have been two significant revisions aimed at enhancing accuracy and reliability.

Background: In January 2022, at the request of a prospective investor, Athena undertook the task of fingerprinting Orange County using its model. Interestingly, two market-leading models yielded conflicting results. While one model indicated a high wildfire risk, another industry participant, that like Athena uses "AI for wildfire risk" portrayed the area as low risk.

The ensuing analysis, as depicted in the provided visualizations, reveals a nuanced reality: certain areas exhibited high risk, while others posed minimal risk. To gain a deeper understanding of the wildfire risk in Laguna Niguel and surrounding areas, click through to the provided link.

The analysis and pictures presented in the visualization offer insights into the fire perimeter and the distribution of risk across the landscape. By examining the data, users can discern the intricacies of wildfire risk assessment and appreciate the nuances in Athena's wildfire risk assessment for communities and insurers.  The risks varied location, based upon more than a dozen factors, which were modeled using dozens of indexes and derivatives. The discrepancy between the fire damage and the 3 models' predictions, underscores the inherent complexity of wildfire risk assessment, and the usefulness of Athena's approach, vis-a-vis, its competitors.

This case study serves as a valuable lesson in the differences in the accuracy of the multiple fire risk models currently in the marketplace. The Laguna Niguel wildfire case study highlights how communities can use wildfire risk assessment to focus on areas with the greatest risk. With insights from Athena, stakeholders can benefit from the most accurate risk assessment by location for their CWPPs, ultimately enhancing community preparedness and resilience in the face of wildfire threats.

One Community Example - Orange County California in 2022

Wildfire Risk in Hawaii - Contrary to popular belief, certain parts of Hawaii, often perceived as the wettest spots on Earth, are not immune to wildfires.

Recent events have underscored this reality, challenging conventional assumptions about the state's susceptibility to such disasters. Despite Hawaii's limited history of fires and the absence of a Wildland Hazard Potential (WHP) map from the US Forestry Service, Athena has embarked on a collaborative effort with a local utility in the state.

Published in December 2023, this report sheds light on the emerging wildfire risks in Hawaii and explores the risk to residential homes.

Hawaiian Homes at Risk of Wildfire

Resilience & Mitigation Prioritization in San Diego County -  Unveiling Wildfire Risks and Socioeconomic Dynamics.

Published in June 2023, this case study delves into the intricate interplay between wildfire risks, socioeconomic factors, and mitigation strategies in San Diego County. This case study serves as a testament to the power of data-driven insights in informing strategic decision-making and fostering resilience in the face of environmental challenges. By harnessing the synergy between technology, analytics, and community engagement, Athena is paving the way for a more resilient and sustainable future in San Diego County and beyond.

Navigate to the provided Tableau link to access an interactive visualization of the wildfire risk landscape in San Diego County. The landing page presents a detailed breakdown of wildfire risks by zip code and Wildland-Urban Interface (WUI) blocks, which align with census blocks. By clicking on individual bubbles or selecting multiple areas, users can unveil correlations between high-risk zones, poverty levels, and property values.

Dive deeper into the dynamic nature of wildfire risks by exploring the "Risk Matrix" tab. Here, you'll gain valuable insights into how conditions and probabilities have evolved across the county over time, with a specific focus on WUI blocks that have experienced wildfires since 2017. This analysis provides a nuanced understanding of shifting risk profiles and informs proactive mitigation strategies.

For those inclined to delve into the technical details behind the data generation process, the "Profile Matrix" tab offers a fascinating glimpse into the methodology. Using Eigen Values across various land conditions and risk profiles, this tab provides a deeper understanding of the underlying algorithms and analytical frameworks driving the insights presented in the case study.

The findings of this study have significant implications for policymakers, urban planners, and stakeholders invested in disaster resilience and mitigation efforts. By uncovering the complex relationships between wildfire risks, socioeconomic disparities, and land conditions, Athena equips decision-makers with the knowledge needed to prioritize interventions and allocate resources effectively.

Athena's partnership with local utilities and stakeholders underscores the importance of collaborative approaches to resilience building. By fostering dialogue, sharing insights, and leveraging data-driven strategies, communities can work together to enhance preparedness, mitigate risks, and build a more resilient future.

Interactive Case Study for San Diego

Mapping Wildfire Risk Across United States

Published in October 2021, this comprehensive case study sheds light on the growing wildfire risk across the United States. With the Wildland-Urban Interface (WUI) expanding by 2 million acres annually and over 80,000 communities facing the threat of wildfire damage, understanding and mitigating this risk is of paramount importance. This case study serves as a call to action to address the escalating wildfire risk facing communities across the United States. By leveraging Athena's data-driven insights and fostering collaboration between stakeholders, we can strengthen our preparedness, enhance our resilience, and mitigate the impact of wildfires on lives, property, and ecosystems.

Navigate to the provided tab titled "Expanding Geographical Risk" to delve into the expanding footprint of wildfire risk across the nation. Through interactive visualizations and insightful analyses, this section highlights the alarming rate at which the WUI is encroaching upon previously unaffected areas, placing more communities in harm's way.

The findings of this study have profound implications for disaster preparedness and mitigation efforts across the United States. By understanding the geographical spread of wildfire risk and its potential impact on communities, stakeholders can develop tailored strategies to enhance resilience and protect lives and property.

Addressing the complex challenges posed by wildfires requires a collaborative approach in Community Wildfire Protection Plans (CWPP), involving government agencies, community organizations, academia, and industry partners. By sharing data, expertise, and resources, stakeholders can work together to develop innovative solutions and build more resilient communities. Together, we can work towards a safer and more sustainable future for all.

Interactive Tools for Wildfire Risk Throughout the United States

Case Studies for Insurance Industries

Finding Unit Growth Without Adverse Selection

The MGA provided the addresses of their 2022 declines. Of all prospective customers rejected for commercial property insurance, 271 declines were for brushfire risk scores, with 146 of these properties scored by Athena Intelligence as having less than a 1% chance of being affected by a wildfire (if a wildfire came to their area). This represented $16 Million in premium that was not underwritten by the Managing General Agent.

By examining the MGA's records of their 2022 California declines, it is clear that the brushfire risk score recorded was inconsistent, which contrasts with the profiling description of risk and probabilities generated by Athena. Location profiles are clearly defined and shown, with each 30 sq meter pixel described with a unique alphanumeric code, and unique time sequence. In this examples, cohorts of profiles can be reviewed across multiple years. This creates an actuarially valid risk measurement, quantified using Athena's geospatial, conditional, profiling tool.

Navigate to the provided link to access the detailed analysis comparing Risk Score vs. Voice of the Acre®. This visualization offers a comprehensive comparison, allowing users to delve into the nuances of risk, by profile throughout California. By examining the data, insurers can gain confidence in Athena's insights and the differences between wildfire models in the marketplace.

By leveraging advanced analytics and predictive modeling, Athena offers insurers insight into changing conditions on the land, avoiding unnecessary declinations and increasing profitability. In conclusion, this case study serves as a testament to the importance of data-driven decision-making in achieving sustainable unit growth. By aligning risk selection practices with empirical evidence and insights, insurers can unlock opportunities for expansion while maintaining profitability.

An MGA Discovers $16 Million USD in Lost Premiums

Case Study for Property Insurance Underwriters

We've crafted our underwriting model to simplify decision-making, employing a straightforward color-coded system: Red (High Risk - Don't Underwrite), Green (Low Risk - Underwrite), and Yellow (Moderate Risk with Offsetting Positives, Consider Further). This model is tailored with actuaries in mind, ensuring consistency in interpretation regardless of the occurrence or location of wildfires.

By default, Red locations are associated with 71% or more of fire damage, while Green locations experience 5% or less. Customization options are available upon request for underwriters seeking lower loss thresholds.

These were published in mid-2023 reports. Athena provides exact probabilities of wildfire damage for each property, along with various flags and raw data points sourced from the USFS Wildland Hazard Potential (WHP). Additionally, we include a map illustrating risk within a 2-mile radius of the property, accessible through our online portal or via API in JSON format.

This case study showcases six examples: two Green, two Yellow, and two Red. On the left side, you'll find the output of our MVP, while the right details the burn experience specific to that profile and state over recent years. This comparative analysis offers valuable insights into the efficacy of our model and its alignment with real-world wildfire occurrences.

Six Property Underwriting Example

Evaluating Wildfire Risk Across a Portfolio

This case study exemplifies the power of data-driven decision-making in optimizing portfolio risk for reinsurance companies. By leveraging advanced analytics and predictive modeling, companies can gain valuable insights into risk exposures, tailor pricing strategies to reflect risk profiles, and maximize profitability while ensuring capital efficiency. As the reinsurance industry continues to evolve, the ability to effectively manage portfolio risk will remain a critical determinant of success.

The link below will take you to a comprehensive analysis of eight notional multi-state portfolios. Ranging from 4,000 to 14,000 structures each, these portfolios represented a diverse array of risks and exposures. Athena's advanced analytics and predictive modeling demonstrates the relative wildfire risk of each portfolio. This allows reinsurers to more accurately price risk and preserve profitability.

By accurately assessing the wildfire risk associated with each portfolio, pricing strategies can be tailored to reflect the level of risk, maximizing returns. Furthermore, by optimizing capital allocation across portfolios, a company can improved its capital efficiency, with appropriate reserving.

Through this type of portfolio risk optimization, a reinsurance company can implement more effective risk management strategies, reducing exposure to potential losses. The new pricing strategies, linked to more accurate risk profiles, will generate more consistent profitability. More accuracy in reserving will improve capital efficiency, generating more consistent returns on capital.

For reinsurers, the optimization of portfolio risk plays a pivotal role in ensuring profitability and capital efficiency. This case study, based on Athena's innovative wildfire risk assessment, explores how a reinsurance company can leverage advanced analytics to optimize profitability through an understanding of the risks of different underwriting programs.

Demonstration of Portfolio Risk Optimization

Case Studies for Investors

For Real Estate Investors - An example of 2 Properties in San Bernadino County

This case study offers a compelling contrast between two commercial properties situated less than a mile apart in San Bernardino County, California.

In the event of a wildfire impacting any part of the county, one building faces a 1 in 61 chance of sustaining significant damage, while the other property's risk is significantly lower at 1 in 951. "Significant damage" is defined as being inside the fire perimeter or experiencing greater than a 50% loss of value, as outlined in CalFire reports. Both criteria were utilized to train the earliest iterations of Athena's Voice of the Acre model.

Published in 2022, this comprehensive 9-page report includes aerial imagery, maps sourced from Google Earth, and an in-depth explanation of Athena's wildfire risk assessment algorithm. The Voice of the Acre® model was specifically designed to address the three most pressing questions that asset managers, insurance professionals, and financial sector experts typically ask when evaluating wildfire risk:

Through a combination of advanced analytics, predictive modeling, and geospatial analysis, Athena's Voice of the Acre® provides actionable insights for transactions and portfolios. The downloadable PDF of this case study offers institutional real estate investors an opportunity to understand a new, valuable resource for evaluating wildfire risk within their investment portfolios.

Athena Case Study for 2 Properties (Downloadable PDF)