New wildfire mitigation tech insurance pros should know

To develop a parametric insurance solution — one innovative way to address wildfire risk — a policy is structured with certain events plainly stated in order for coverage to be automatically triggered. (Photo: Phil Pacheco/Bloomberg)

One of the most notable aspects of the 2019 California wildfire season was the introduction of scheduled intentional power outages by utility companies when fire conditions were forecast. This was meant to minimize or eliminate ignition risk from downed powerlines. These preemptive power shutoffs by Pacific Gas and Electric Company (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E), occurred in approximately 30 counties in California for approximately 23 days total.

The shutoffs initially affected around 800,000 customers or about 2 million people. Stanford University’s Michael Wara, an expert on electricity policy in California, estimated the total costs of the blackouts were somewhere between $1.8 billion and $2.6 billion.