Back Challenge: Businesses in California protecting their properties against wildfire According to the United States Environmental Protection Agency, there are, on average, 70,000 wildfires in the US every year. In 2017, the worst year on record, damage from wildfires was estimated at $24 billion. Fire suppression alone now costs the US Federal Government, on average $2.8 billion per year. In California the situation is more severe. Following major insurance losses between 2017 – 2020 and 2021, the cost of property insurance in the state rose to the point that an ‘insurance crisis’ ensued. Solution: A new wildfire syndicate at Lloyd’s To provide insurance cover to commercial businesses in California who are unable to buy insurance through the usual channels because of the high level of risk they pose, the Wildfire Defense Systems (WDS) has launched a syndicate at LIoyd’s. Founded in 2008, WDS is a private-sector wildfire service that protects properties. They work on behalf of the insurance companies who insure these properties helping to prepare a property in advance of a wildfire by implementing mitigation tactics. Once they service a property, WDS has a more than 99% success rate that it will survive a fire, and they have tracked over 100,000 wildfire ignitions since 2013. Through their syndicate (Wildfire Defence Syndicate 1996) at Lloyd’s they now provide the insurance solution for California commercial (Excess & Surplus) wildfire-prone properties. Excess and Surplus Lines—also known as ‘E&S’—insurance is designed for businesses with uniquely high risks that the traditional insurance market will not cover. WDS chose to enter Lloyd’s market as a syndicate in a box (SIAB) due to the highly innovative and niche nature of the Californian wildfire solution. The SIAB option was created by Lloyd’s to allow smaller, entrepreneurial businesses to establish an underwriting platform in the Lloyd’s insurance market without having to go through the same regulatory and financial conditions designed with much larger insurance businesses in mind. Impact: Protecting from wildfire losses As a result, WDS are able to underwrite risks of a substantial nature. This helps keep Californian businesses in operation, protecting them from loss, providing for business continuity and reducing wildfire's economic impact to society. Lloyd’s brand is highly respected which gives the WDS insurance solution greater credibility and for every insurance policy written by the Wildfire Defense Syndicate, the commercial policyholder has the option to make use of the wildfire response services as well. Today’s WDS offering is supplemental to work done by local, state, and federal agencies and provides for a scalable contribution to reducing structure loss in a climate change environment. Stay in touch Sign up to our mailing list to make sure you're the first to hear about news, reports, and events relating to financial and professional services from the City of London Corporation. Sign up now Share: Share to LinkedIn LinkedIn Share to Twitter Twitter Share to Facebook Facebook Share to WeChat WeChat Share to WhatsApp WhatsApp Share to Email Email Related content Case Study Castlepoint Systems | opportunities outside of its native Australia Nov 2023 - We spoke to Rachael Greaves, co-founder and CEO, about Castlepoint’s information governance and compliance service and the growth opportunities outside of its native Australia. Castlepoint Systems | opportunities outside of its native Australia Case Study Aon | helping clients manage the risks and opportunities from climate change Nov 2023 - Climate change is one of the most perilous emerging risks of our time, impacting countless lives. We spoke to Aon, about the role of insurance in mitigating climate risk. Aon | helping clients manage the risks and opportunities from climate change Case Study Aware Super | establishing a UK presence Nov 2023 - We spoke to Aware Super about why the pension fund selected London as its first overseas base for its international expansion strategy. Aware Super | establishing a UK presence Case Study Tradeweb | accomplishing global success through London Nov 2023 - We spoke to Enrico Bruni, Managing Director and Head of Europe and Asia Business at Tradeweb, about the role London plays in their international growth strategy. Tradeweb | accomplishing global success through London