Taking a Look: Exposure vs. Structure Survivability

Did you know that most hazard models only account for 30-40% of the overall natural disaster risk of a policy?

Once you account for around 10-15% of risk out of our control, you may be start to wonder: where does the other 50-60% come from?

If you’re part of a risk management or property risk team, you likely already know that this stems from desk underwriting, inspection data, and a whole host of other tech solutions that give you a lot of variables but not a lot of actionability. 

Only using models like these is like diagnosing a patient based only on their symptoms without considering their genetics, medical history, or lifestyle!

Tell me if this sounds familiar: A new property lands on your desk. The home is flagged as high risk for wildfire, but still falls in the gray area of what you can and can’t insure. Now, you have to spend the next hour combing through property elements to determine if this is a “good” risk, only you don’t really know what that means from a wildfire perspective. 

At Faura, our goal is to illuminate new, profitable property risks while saving risk management teams time and money. We pinpoint the other half of risk - property survival and vulnerability. We have already unlocked over $100 million in new premium for companies writing business in high-risk areas, all because we can now take a closer look and quantify a structure’s resilience.

Most underwriters weren’t trained in the nuances of building science and rely heavily on CAT models, but these aren’t crystal balls; Insurers are still losing billions every year and are stuck trying to improve this process with little to no direction.

Now, imagine that instead of sifting through manual inspection PDFs and Google Streetview, you could quantify a property’s structural integrity and resilience in the touch of a button. Instead of spending time trying to find the issue with the property, you are immediately directed towards it. 

Understanding the survivability of a structure not only improves underwriting efficiency, but allows companies to bypass manual processes that are outdated and are quickly outpacing the rest of the industry. What is your competitive edge? 

INTO THE SCIENCE:

We’ve aggregated over 60+ different studies along with our own Faura datasets to consistently prove that survivability works. According to well-known providers like Verisk AIR and RMS, areas with identical wind hazard ratings had loss variation ranging over 5x due to changes in construction, maintenance, and preparedness. (1)

Nature reported back in 2021 that buildings in flood-prone areas reduced their damages by 4x using building retrofits, and this is compared to common tactics like zoning changes or relocation in certain coastal regions.

Just a year later, the RAND Corporation published a study stating that properties with 5-30+ feet of defensible space and fire resistant roofs had survival rates 3-6 times higher than similar homes without those features. (2)

Now, let’s dive in a bit deeper to understand how survivability can impact structures and save companies money, time, and even lives.

CASE STUDY: WILDFIRE

When evaluating the Palisades fire this past January, Faura measured everything from wood decks to exterior vents to defensible space and debris. 

What we found was that structures that scored above a 65 on the resilience scale resulted in 75% less claims on properties in the burn scar. 

Not only that, but the Faura scores were able to predict property survival with 94% accuracy, with carriers saving anywhere from $20 million to $64 million in losses. 

Even under full ember exposure, hardened homes can resist ignition as shown here in this IBHS Testing video. (3)

How about another example? 

A client heavily impacted by the Mountain Fire was able to run their properties through the Faura index, and what we found was shocking. 

Not only did Faura predict which properties would still be standing with 95% accuracy, but underwriters could go back through and see potential risks highlighted and confirmed by the model. Roofs, siding, foundation - the correlation was clear. 

If Faura had been used for risk selection with their risk tolerance adjusted for, they could have saved over $120 million.

CASE STUDY: HURRICANE

Faura has now analyzed hundreds of thousands of properties commonly impacted by natural disasters, and when it comes to hurricane - it all comes down to the roof, bracing, and the siding. 

NOAA conducted a series of Post-Storm Damage Surveys from 2018-2022, and in Category 3+ storms, gable roofs failed at 3 times the rate of hip roofs. (4) On top of that, roof shape and type accounted for up to 40% of total loss variation within the same wind speed zone (there’s that other percentage we’ve been looking for!) (5) When was the last time you thought about that during underwriting?

Now, if we flip the narrative around, homes with secondary water barriers also had 40% lower internal losses across the insurance industry. (6) This is a proven methodology that works extremely well, along with wind-rated garage doors.

Faura ran a study on Hurricane Michael and found that properties that were properly fortified had a 56% higher likelihood of survival. This was further corroborated by IBHS, who confirmed that hardened properties had up to 80% lower insured losses than their counterparts. (7)

CASE STUDY: HAIL

When we think about hail, we’re typically not thinking about survivability but moreso vulnerability - and in this case, it’s equally as important. As the most common claim experienced on properties across the country, we should be actively trying to mitigate our risks. 

Much of hail risk focuses on the roof, with Class 4 roofs filing 50% less claims and costing 58% less in claims on average. Impact resistant shingles have been shown to consistently reduce damage by anywhere from 60-75%. (8)

When analyzing a year’s worth of natural disaster data in 2020, 2022, and 2024, Faura’s software pinpointed properties most likely to have claims based on their property characteristics as well as mitigation activity that a policyholder could do to reduce risk. This data has already helped identify hundreds of properties who need upgrades and can qualify for reductions in their premium for more hail-proofed applications.

To learn more about Faura, please visit https://www.faura.us/for-insurers.