Kevin Stein Kevin Stein

Executive Interview - 1 of 3

This article is part of a three-part series of interviews with InsurTech executives who are focused on insurance coverage issues for wildfire-prone regions.

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Kevin Stein believes that wildfires no longer fit into the standard insurance market.

Stein is the CEO of Delos Insurance Solutions, an MGA that focuses on homeowners insurance in California. When he and his cofounder, Shanna McIntyre, entered the industry, “we found that there was a little bit of a misunderstanding of wildfire,” Stein said.

Generalist perils covered by large, standard market insurers change slowly and can use actuarial methodology to be understood, Stein said. He noted that specialist perils, like cyber insurance, aren’t the same. These perils change rapidly or are complicated, meaning they require specialty expertise and data.

“We believe that wildfire is that now,” Stein said. “And I think the biggest difficulty is that it’s covered under home insurance and standard commercial property. And therefore, carriers have been saying, ‘Hey, I’ve been writing home insurance [for] 100 years. I should be able to do this.'”

Over the last seven years, Stein said he thinks carriers have finally come to realize, “No, this doesn’t work for them.” He believes that groups that view and approach wildfires in new ways will become more predominant in the California market.

Delos launched in 2017. Stein and McIntyre both have aerospace industry backgrounds. They recognized an opportunity to take new satellite imagery and model wildfire in higher spatial and temporal resolutions.

Related articles: Underwriting Wildfire Risk by Shanna McIntyre, written for CM in 2021; Delos to Insurers Shedding Wildfire Risk: Send the Homes to Us, Insurance Journal 2023 profile

In other words, they sought to use the data for more accurate information at physical addresses and use it to understand how those addresses could be affected by changing climate conditions. Delos partnered with Spatial Informatics Group (SIG), an environmental think tank made up of more than 100 academics who co-develop modeling for civil governments.

“All this proprietary research, coupled with this new proprietary algorithm, and that turns into our wildfire underwriting,” Stein said. “And so far, back through 2017, it’s been, by our assessment, head and shoulders above the other models in the industry.”

Delos has a broad California footprint. As large carriers shrink their geography in the state, Delos leans on its modeling to “write in a lot of places where people don’t,” Stein said. Still, those models find areas in the state that are at extreme risk.

“It’s an unfortunate reality, but we do believe it’s a reality,” Stein said. “So, there are certain areas that we’re not willing to insure. That’s a lot less than what other people are declining. We’re accepting a lot of business that other people are declining, [a] very significant amount.”

“There are certain areas that we’re not willing to insure. That’s a lot less than what other people are declining. We’re accepting a lot of business that other people are declining, [a] very significant amount.”

Kevin Stein, Delos

Stein explained that Delos accepts 65 percent of the business that the primary market is currently declining because of perceived wildfire exposure. When asked what goes into Delos’ modeling, Stein said the company has a “significant amount of sophistication around wind and weather.”

Most other models focus on vegetation, he said, but in today’s landscape, wind and weather are “the biggest driver of wildfire loss in the Western U.S. and a lot of other places as well.” Delos taps into detailed wind maps and understandings of precipitation and vegetation moisture developed by SIG that inform the company’s modeling.

This enables decision-making to more deeply account for current conditions and predict how they could change in the next couple of years. SIG has also developed “a significantly more sophisticated understanding of vegetation,” Stein said.

Delos has a significant amount of information regarding how a fire would spread once it starts and what the firefighting strategy would be to defend against it, too. The company also has detailed understandings of neighborhoods and homes from large landscape and hardening perspectives.

Stein said that Delos believes this is what’s required to understand fire today.

“These folks get paid tens of millions of dollars a year to do seasonally wildfire research, and they’re some of the world’s top experts in it,” he said of SIG. “So, of course, they’re going to put money in that effort to developing a lot of really detailed information that other people just don’t have that space in their business plan—the space in their balance sheet—for that much research in wildfire.”

Stein called the fires currently burning in Southern California “a human tragedy.” Delos didn’t expect something of this magnitude and this level of loss, but the company knew it was possible, Stein said.

When asked on Jan. 13 if Delos insured any homes in the areas affected by the fires, Stein said that “our view of risk did encapsulate this event, so the areas that had the fires, we had seen as really risky for this type of event. Therefore, we were not writing in those locations.”

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Years before the January 2025 Palisades and Eaton fires sparked in high-wind conditions in Southern California, InsurTechs focused on insurance coverage issues for wildfire-prone regions.

In a three-part series of articles, executives of three—Delos Insurance Solutions, Kettle and Faura—shared their perspectives on the peril overall and discussed how the latest fires could affect insurance moving forward. Here, executives of Delos explain why wildfire, like cyber, can’t be treated like a standard peril.

Read about Kettle in Part 2, “Parametric Insurance Meets the Wildfire Peril: InsurTech Kettle Responds” and about Faura in Part 3, “Structure Data Boosts Understanding of Wildfire Risk: Faura CEO