A recent survey by ZestyAI indicates that the insurance industry is increasingly turning to artificial intelligence (AI) to manage risks associated with extreme weather, with one in four insurers now utilizing AI to assess convective storms. Among the surveyed leaders, stochastic models were preferred for storm risk evaluation, while traditional actuarial models were favored for wildfires. Despite differing preferences for predictive models, a significant majority believe that AI will play a pivotal role in addressing climate-related losses, with many asserting that it will lead to profitable growth opportunities. The call for enhanced transparency in predictive modeling is also noteworthy, as leaders seek better communication with policyholders about risk mitigation strategies.
