Ryan Vigus, EVP of Personal Lines Product Management at CSAA Insurance Group, brings a wealth of experience in developing insurance products for AAA Members. He dives into California’s evolving homeowners insurance landscape amid rising wildfire risks and historical market shifts. Vigus discusses the financial pressures insurers face and the need for innovative risk assessment tools. He advocates for a strategic approach that prioritizes policyholders, calling for improved building codes and better preparedness to address climate challenges.
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insights INSIGHT
Fire Crisis Drives Insurance Issues
The real crisis is homes burning down, not insurance itself.
Solving wildfire and home loss issues addresses the root, fixing insurance problems downstream.
question_answer ANECDOTE
Wildfire Shift Changed California Risk
Ryan recalls California's paradigm shift from rare fires to annual major wildfires.
Fires like North Bay 2017 and Camp 2018 reshaped risk views and insurance challenges.
insights INSIGHT
Perfect Storm of Rising Insurance Costs
Declining auto claim frequency reversed, raising insurer costs.
Combined with wildfire losses, California insurers faced a perfect storm of rising risks and costs.
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Ryan Vigus leads CSAA Insurance Group’s personal lines products, including auto, home, umbrella, and pet. His team develops and manages insurance products and product experiences that serve the needs of AAA Members. Ryan’s responsibilities include Product Strategy and Development, Product Management, Actuarial, and Data Science. CSAA Insurance Group is a AAA insurer that serves AAA Members in 23 states and the District of Columbia.
Ryan has served on the board of directors and various committees for the Insurance Institute for Business and Homes Safety (IBHS) since 2018 and currently serves as the chair of the board of directors.
He has a master’s degree in applied mathematics from Bowling Green State University (Ohio) and is a Fellow of the Casualty Actuarial Society.
Highlights from the Show
California is a massive economy that has had a history of difficult insurance situations. Back in the day, Auto Insurance became a problem, with rates jumping and profitability suffering. California’s insurers looked to Homeowners to make up the difference to remain profitable. And then the wildfire situation changed dramatically, putting great pressure on the industry, leaving many with the need to dramatically increase rates, pull out of the state, or both.
Homeowners Associations often put in place rules to govern how homes in the development look to uphold standards and consistency across homes. But what happens when those standards are at odds with the decisions that make a home more resilient to things like hail, hurricanes or wildfire? Can you install a better roof, plant different vegetation (or remove it), etc., if it means your home will still be standing when others may not? Colorado has made laws that ensure HOAs cannot restrict a homeowner from doing something that makes their home safer from losses like hail or wildfire.
If your home falls victim to a flood or hail damage, and your insurer pays to repair the damage, what if there was a way to enhance how you rebuild so your house is less likely to suffer a loss in the future? Wouldn’t the time to make such upgrades be when you’re working on those items anyway, like upgrading the type of roofing materials you use when replacing a roof destroyed by hail? That’s not how insurance works today. But what if it could be? Ryan shares an interesting perspective as we discussed ways to combat the spiraling cost of buying homeowners insurance by homeowners and providing it to them by insurers.
What can you do to materially impact the chance a home suffers a loss in a weather-related event like a hurricane, flood, hail storm or wildfire?At PLRB, we see the impact of better building codes on losses, and many areas have seen the benefit in how newer construction stands up to these weather events. Ryan discusses one hold up to making your home more resilient at a cost to the homeowner is the availability of subsidized insurance through state FAIR plans that allows people to still get coverage at a low enough cost to discourage investing in hardening your home to loss. This may be contributing to some of the issue states like California have in insurance affordability and viability.
What is the long-term solution to making insurance affordable to buy and viable for insurers to sell? Do we have an insurance affordability problem? In California, Ryan believes we don’t. Instead, he says we have a “homes burning down” problem, and we in the insurance industry need to stretch beyond our traditional role of paying after a loss to thinking about how we stop the losses upfront and facilitate that.
This episode is brought to you by The Future of Insurance thought leadership series, available globally from Amazon in print, Kindle and Audible audiobook.
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