The CDI’s pre-application required information determination (PRID) process will further ensure the model’s integrity and compliance with Proposition 103. Credit: Vitalii Vodolazskyi / Shutterstock.

Verisk has officially requested a review of its wildfire catastrophe model by the California Department of Insurance (CDI), becoming the first modeller to do so following new regulations in the US state.

The Verisk Wildfire Model for the US integrates wildfire hazards, vulnerabilities, and trends, particularly in wildfire-prone areas such as California, which experienced more than 391,000 acres of wildfires in 2023.

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This move is aimed at strengthening California’s insurance market through collaboration between insurers, modelling firms, and the CDI, leading to a more stable and competitive environment.

The CDI’s pre-application required information determination (PRID) process will further ensure the model’s integrity and compliance with Proposition 103.

This initiative aligns with the state’s sustainable insurance strategy, implemented by Insurance Commissioner Ricardo Lara, which includes the use of catastrophe models by insurers to evaluate catastrophic risk.

The regulation came into effect on 2 January 2025.

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California introduced the Net Cost of Reinsurance in Ratemaking Regulation, a rule mandating insurers to offer coverage in high-risk areas.

Insurers must underwrite policies covering at least 85% of the statewide market share, with gradual increases to meet this target.

Verisk Extreme Event Solutions president Rob Newbold said: “We’re proud to be the first catastrophe modeller to work with the California Department of Insurance to offer a modelled assessment of wildfire risk and to help bring stability to the insurance market. This is a pivotal moment for California’s insurance market, one that promises improved resilience and stability for providers and potential insureds.”

Last October, Verisk launched its all-in-one reinsurance platform, Whitespace, to the US market.

Whitespace is now available to US brokers, wholesalers, carriers, and risks, catering to various business classes and regions.