Stand Insurance: AI-Driven Startup Tackles Climate-Impacted Property Insurance Crisis

How a Startup Plans to Offer Coverage to High-Risk Homeowners Dropped by Big Insurers

This week, Stand came out of stealth mode to offer an insurance protection package for California homeowners highly exposed to the growing threat of wildfires. The company was founded by a quartet of Silicon Valley entrepreneurs determined to find a solution for the nearly half a million Californians dropped by insurance companies because their homes were classified as high fire risks. Those homes represent just a small portion of the estimated $22 trillion worth of U.S. properties facing increased threats from a host of calamities generated or exacerbated by climate change. How can a upstart startup like Stand do that when the deep pocketed giants in the over $108 billion U.S. property insurance sector have thrown up their hands and backed away? Partly by taking the opposite approach to analyzing the risks involved, and then moving to mitigate them. As disasters linked to climate change have multiplied, big insurers have tended to assess attendant risks across entire U.S. zip code areas. They then often cut ties with a large number of vulnerable clients in those zones all at once -- and refuse to issue any new policies. In the case of wildfire-charred California, many of those companies have partially reimbursed property owners for taking initiatives to make their houses more fire resistant, only to drop their coverage months later. Stand, by contrast, uses advanced modeling software and artificial intelligence to create intricate maps of fire risks it identifies on individual properties. It then simulates how flames would advance through foliage and consume homes under various likely scenarios. Based on that, the startup works with homeowners to reduce the number or severity of those threats, offering them insurance coverage from fire and other potential damage once that work gets carried out. What's more, according to co-founder Dan Preston, Stand's AI-enhanced tech can anticipate how those risks are likely to evolve as consequences of climate change worsen in the future.

Insurers are fleeing California due to wildfires. But this startup plans to work with the riskiest homes

As wildfires get bigger and more destructive in California, more insurance companies are pulling out of the state -- or sharply limiting the number of policies they're willing to carry. But a new startup called Stand just launched with a deliberate focus on homes at risk of fire. Stand is "focused on properties that are exposed to climate-impacted risks," says CEO and cofounder Dan Preston. The startup will eventually also include homes at risk of flooding and damage from storms. But it's starting with the challenge of wildfire in a state where more than a million acres burned this year and hundreds of thousands of people have been abandoned by their insurers. The current approach to insurance no longer works in the age of climate change, Preston argues. "We think that the traditional way of doing insurance, which is to take the last 10 years of what we've seen and then price that for the next 10 years, is not actually going to work when the number of these wildfires or wind storms are growing very rapidly and causing a lot of uncertainty," he says. "The only way to really solve this problem is to directly intervene and work with property owners to actually make the properties themselves safer." Some other insurers already offer discounts if homeowners in fire zones take certain steps like cutting down trees close to their house. But Stand goes farther, using AI modeling to see exactly how a fire is likely to burn on a specific property. (The company aims to insure anyone who implements their mitigation recommendations.)

Team Of Silicon Valley Veterans Launch Stand Insurance, Using Physics-Driven AI To Insure The World's Climate-Impacted Properties

After raising $30 million, Stand launches first product: California homeowners insurance that insures and fortifies properties to be resilient to wildfire SAN FRANCISCO, Dec. 16, 2024 /PRNewswire/ -- Stand, the company reimagining insurance for climate-impacted properties, today announced the launch of its debut product: California homeowners insurance that insures and fortifies properties to be resilient to wildfire. Founded earlier this year, Stand is emerging from stealth with a world-class team, the backing of top-tier reinsurers, an AM Best A- Rating, and $30M in funding from Inspired Capital, Lowercarbon, Equal Ventures & Convective Capital. With this foundation, the company is poised to write over $2B in home coverage within its first year. It is no secret that the insurance market is in a climate crisis. Amidst the 4th worst fire season in California history, insurers are leaving large geographies to avoid fire risk. Many homeowners are now under-insured, self-insured, or on government plans of last resort. The problem is not unique to wildfire: nearly half of all homes ($22 trillion worth) in the U.S. are at severe or extreme risk of damage from climate-driven events. Stand has re-thought insurance for this new era, offering a solution that protects property while insuring it. By combining expertise in fire, fuel, land, and structures with advanced physics and AI modeling, Stand provides property owners with tailored risk-mitigation plans. These plans prioritize specific improvements, such as replacing mulch with gravel in a critical area, or replacing a Juniper tree with a Maple to effectively reduce risks. Quantifiable risk reductions translate into more accurate pricing, enabling Stand to offer policies in areas others can't or won't serve -- a win for both homeowners and the company. "We are able to build a digital twin of properties and use physics to simulate how extreme weather and disasters would impact them, an approach that has never been used before in the insurance industry," says Dan Preston, Co-Founder and CEO of Stand. "We believe the only viable path forward is to re-think how we approach risk itself. At Stand, we use advanced modeling and AI to make homes safer and to protect homeowners in the face of growing climate challenges." Stand takes a highly interdisciplinary approach across insurance, wildfire, science and consumer distribution and was founded by a team of experts in these domains: Dan Preston, Co-founder, CEO. Dan was former CEO at MetromileJason Mueller, Co-founder, CPO. Jason was former CPO at PolicygeniusSam Shank, Co-founder. Former CEO at HotelTonight (acquired by Airbnb)Bill Clerico, Co-founder. Former CEO at WePay (acquired by JP Morgan), Managing Partner at Convective Capital Support is bolstered by Stand's partnership with Concert Specialty Insurance Company®, a member of Concert Group®. Leveraging Concert Specialty's "A-" AM Best rating and its commitment to developing innovative risk solutions. Stand is headquartered in San Francisco. Please visit standinsurance.com for additional detail. For inquiries, please email: [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/team-of-silicon-valley-veterans-launch-stand-insurance-using-physics-driven-ai-to-insure-the-worlds-climate-impacted-properties-302333108.html SOURCE Stand Market News and Data brought to you by Benzinga APIs