Willis and The Nature Conservancy have unveiled a new insurance policy that takes into account efforts to mitigate wildfire risk. Structured by Willis, the US$2.5m wildfire resilience solution was developed for Tahoe Donner, a private homeowners association in California.

In collaboration with the Center for Law, Energy and the Environment at the University of California, Berkeley, the policy was developed and placed to demonstrate lower premium pricing and improved availability where ecological forest practices can be demonstrated. Such techniques include tree thinning to improve the health and growth of the remaining trees, and planned fires to clear out flammable vegetation – both proven to reduce wildfire risk and make forests healthier.

Tahoe Donner has completed forest management projects over 1,520 acres since 2015.

Willis says the new policy, covering 1,345 acres of Tahoe Donner’s forested and recreation land, has a 39% lower premium and 89% lower deductible than would have been the case without nature-based forest management.

David Williams, associate director, Alternative Risk Transfer Solutions, Willis, said: “The forest management work completed by Tahoe Donner, by removing fuel that could burn and leading to a lower fire risk, has considerably reduced the premium and deductible in this insurance policy.

“At a pivotal moment for California’s insurance market, Willis has worked across the industry to bring this solution to Tahoe Donner, placing the insurance with Globe Underwriting, in a positive step towards a more resilient and sustainable insurance industry.”

Kristen Wilson, lead forest scientist, The Nature Conservancy in California, added: “By placing this innovative insurance product, we hope to inspire other insurance underwriters to account for the benefit of thinning and prescribed fire and increase the implementation of this type of work more broadly.”

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