A What If Instead? Conversation with Alister Watt on the science behind mitigation programs and emphasizes the need for community engagement to foster a culture of safety and resilience.
Guest: Alister Watt, Chief Product Officer, Insurance Institute for Business and Home Safety (IBHS)
On LinkedIn | https://www.linkedin.com/in/alister-watt-32a60b4/recent-activity/all/
Hosts:
Alejandro Juárez Crawford
On ITSPmagazine 👉 https://www.itspmagazine.com/itspmagazine-podcast-radio-hosts/alejandro-juarez-crawford
Miriam Plavin-Masterman
On ITSPmagazine 👉 https://www.itspmagazine.com/itspmagazine-podcast-radio-hosts/miriam-plavin-masterman
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Episode Introduction
As the Chief Product Officer for the Insurance Institute for Business and Home Safety, Alister shares insights on the meticulous science behind mitigation programs and emphasizes the need for community engagement and education to foster a culture of safety and resilience. Tune in to join this conversation as we explore personal experiences with academic expectations, the importance of preparedness in the face of natural disasters, and the role of building codes in mitigating risks associated with wind and wildfire.
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Resources
Wildfire Prepared Home: http://www.wildfireprepared.org
FORTIFIED Home: http://www.fortifiedhome.org
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For more podcast stories from What If Instead? Podcast with Alejandro Juárez Crawford and Miriam Plavin-Masterman, visit: https://www.itspmagazine.com/itspmagazine-podcast-radio-hosts/alejandro-juarez-crawford and https://www.itspmagazine.com/itspmagazine-podcast-radio-hosts/miriam-plavin-masterman
When There’s a Wildfire, It’s Pass or Fail | A Conversation with Alister Watt | What If Instead? Podcast with Alejandro Juárez Crawford and Miriam Plavin-Masterman
Alejandro Juárez Crawford (00:00)
When I was a kid, I was so sensitive to as I say, not as I Folks that didn't seem walk their talk. But I've had this terrible experience recently as someone who teaches undergraduates, where there are all these things that I never did as an undergraduate that I want them to do. I vividly remember when I was a student being like,
Why doesn't the professor understand that even though I missed the last three weeks of the term, that I was in the microfiche, right? For listeners who don't know what that is, it's little books filmed in some basement somewhere, and I was writing a 50 page paper and only 10 was due, why is my professor not pleased? I didn't get it till I was on the other side. about you, Mem? Do you tell them to do things you don't do or are you consistent?
Mim Plavin-Masterman (00:48)
as a syllabus reader, I still am a syllabus reader. I'm like, want to know, I was that kid. Like I need every advantage.
Alejandro Juárez Crawford (00:51)
You're a syllabus. You were that kid?
You didn't admit this to me, because I knew you as a teenager and you didn't admit you were a syllabus reader. I don't know. I don't know how that would have affected
Mim Plavin-Masterman (01:02)
just, let's just say, particularly in business school, I was too terrified to not read the syllabus and not prepare because they would call on me and it was horrible even when I was prepared. So would I make it worse for myself by not being prepared?
Alejandro Juárez Crawford (01:14)
There's logic in this and it's not a bad segue into what we're going to talk about we're going to talk about things that we probably should be prepared for and don't. But just to kind of make myself just to tell some, some exhibit some honesty I never read and I am recognizing I'm saying this on the recording. So editors take this out for have never read a syllabus for any class I ever took, except maybe like in the last week.
Right. And I do a whole thing with courses where I say you should read this syllabus, I've been in here's I'm gonna tell you why.
Mim Plavin-Masterman (01:50)
I mean, I get that. I get that. I'm more like, you should read it, because I did and here I am. So, okay.
Alejandro Juárez Crawford (01:56)
Yeah, so you're leading by example and I'm, I don't know what I'm, drawing people along through, through being open about my hypocrisy, something like that. Well, this.
Mim Plavin-Masterman (02:05)
Sure, sure.
Alister (02:07)
Yeah, I kinda like it in the middle there between the two of you. It's you can't sell the syllabus, you can't sell the class in the first paragraph, you've lost me. I'm not interested. So I'll read the first paragraph and if it's interesting then yeah, I'll add that one to the list otherwise it's gonna be a
Alejandro Juárez Crawford (02:17)
Mm-hmm.
Got you, Alistair, do the intro to the syllabus and that gets covered and the rest is a fine print, as it were.
Alister (02:32)
Yep, that's
Alejandro Juárez Crawford (02:33)
But Mim, you read all the fine prints. You probably read like the little details about, you know, what constitutes plagiarism at the end. My favorite, so in universities now, there's all this discussion of how you deal with students who are right, right using chat GPT or another tool to write their assignments. But my favorite take on this is in Richard Ostman's new murder mystery, like the master murderer uses chat GPT to write all his emails.
Mim Plavin-Masterman (02:35)
I do it.
yeah.
Alejandro Juárez Crawford (03:02)
and disguise where he's from and who he is. It's definitely my favorite use of artificial intelligence so far.
Mim Plavin-Masterman (03:08)
love it. I'm curious what our wonderful guest will say actually about artificial intelligence. But I'm going to give the folks at home a little bit of a background on who we have joining us today. we have Alastair Watt And he is the Chief Product Officer for the Insurance Institute.
for business and home safety, which we'll refer to as IBHS. And it's an independent nonprofit scientific and research communications organization that's supported by reinsurers, by property insurers, and affiliated companies. So currently, they have about half of commercial property insurance sold in the US, if I understand this right, and roughly three quarters of the residential property insurance. And the idea is that they're involved in building safety research. So how do homeowners, how do business owners,
basically have more structures and communities.
Alejandro Juárez Crawford (03:57)
I'm Alejandro Juarez-Croffert. My co-host is Mim Plavin-Masterman. And we're on a mission to launching an experiment of your own or contributing to one as normal as watching videos on your phone. Welcome to What If Instead, the podcast. Now today, Mim, we have a chance to talk about a version of whether we read the syllabus in a sense through the lens.
of the insurance industry in the era of climate change.
Mim Plavin-Masterman (04:24)
right. timing is your friend going to make some lemonade out of some real lemons. And I do not mean to downplay this at all, but for just for people listening in terms of our timing, we're relatively recent from the horrible hurricane, that came up the East Coast and went inland and has really left a path of destruction up through North Carolina, Georgia, Tennessee, Florida, among others.
know, I just want to make sure that people are understanding kind of that's our timeline and our situation because what Alastair is working on is so important. And I think just the combination of that in the background will make it even more salient. So did you get started in working in this area where you're actually working prevent destruction by wind and wildfire? Because it's not a traditional path, but it's so interesting. How did you end up
Alister (05:14)
So I'll give you the idealized version and then I'll give you the truth. The idealized version is that I was working in the mitigation space and then opportunity came up. It was just a perfect fit for me. I applied and got the job. No, that's not what
Alejandro Juárez Crawford (05:28)
Hahaha!
Alister (05:30)
I was working for the National Flood Insurance Program, FEMA, as a And the guy that runs that program, ran that program at the time, was Roy Wright. And so he was the chief executive of the National Flood Insurance Program. We were good friends. called him because I was looking to, I was about to make a career change and I just want to make sure that he still liked me and would give me a reference.
and he said sure and actually I have a prospectus I've been working on for job I'd really like your input on that which is not uncommon for him to ask for as he's trying to perfect this document so I get it and he we're still on the phone I'm reading it I'm like Roy this reads like my resume
He said, really? I said, hmm, would you like me to throw my hat in the ring? He said, I would love.
Alejandro Juárez Crawford (06:21)
This is the greatest example of product market fit through happenstance, right? This reads like my resume. If it were just a line, it would be a great line, Alistair, I love that you let off with the idealized version and the truth. And I'm tempted to take just a second for folks who are looking for an opportunity and just dwell on that because
We tell this story is the idealized version, but it, tell them really works that way, does it? It's much more like what you've described.
Alister (06:50)
Yeah, it's all about introductions. If trust each other, know something about each other, then you can get a little bit of a leg timing is everything, right? You've got to be in the right place at the right time and
Alejandro Juárez Crawford (07:00)
And in your story, someone was presenting you with a problem that you were in a place to help solve, which I think is really intriguing.
Alister (07:09)
Yeah, it's a great job and thrilled to be part of IBHS. I've worked as a consultant. You've worked with many different companies and you go in and sometimes the culture is interesting but not in a good way and sometimes it's interesting in a good way. IBHS just falls into the interesting in a good way. You've got people that are totally committed to a mission of preventing avoidable loss and that's their passion.
And the people that stay here are the people that have that strong sense of grounding in what their purpose really And so this is the first organization that I've ever worked in where I like everyone. There's not one person in this organization that I don't like and have something in common with. So yeah, I'm very glad that I called Roy asking him for a
Alejandro Juárez Crawford (07:58)
So Mim, you know the org theory, but don't they need someone that Alistair dislikes to be their piggy from Lord of the Flies? Like someone to to harsh on? mean, isn't that part of org theory to find that person?
Mim Plavin-Masterman (08:10)
I mean, you don't always want the scapegoat or the villain. You don't want the person who eats everybody else's food in the company fridge. Like don't really want that person, right? So I'm kind of, delighted for him that he has such a wonderful work environment. I think it's great because I think the mission is really important and like having a place where everybody's on the same page means you're just always pushing the mission forward.
Alejandro Juárez Crawford (08:26)
I
So the fact that Alistair's company will make a terrible mockumentary might even be a good thing for his mission. Okay.
Mim Plavin-Masterman (08:40)
for his mission, for sure. Which brings me to my next question. So I would love for you to talk a little bit about the wildfire prepared and the fortified programs and how, and I guess I wanna think of it in this context. Given that you're very closely involved with the insurance side, how do we think about the other piece of it of like the demand for homeowners to ask for these programs?
or for builders to build with these programs. Because to me, seems like those are the other pieces of it.
Alister (09:11)
Yes.
Yes, great question. So let's take it back to the science and then wind it forward into the implementation of that. So our science is meticulous. We have a custom design facility here in 99 acres in the middle of nowhere. If you find this place, it's because you took a wrong turn. And that's by design because there's a lot of noise that's produced by 105 fans, each of which have
355 horsepower behind them. That's what you need in order to generate hurricane force winds inside a building, which is a crazy so what we do on the wind side is we build houses, full-size We build it for testing out a particular engineering design. We build the house with that engineering design implemented. And then alongside it, we'll put a typical house like you would see
floating away in Hurricane And then we start exposing those structures to wind. And it's not just flip a switch and off you go and see what happens. These things are on turntables. We move them 10 degrees at a time. They get about 15 minutes of a wind pattern. That wind pattern, including all the ebbs and flows, is based on a real hurricane. So...
Every time there's a hurricane, are lots of people from Texas Tech and various other academic institutions and NGOs and some governmental weather organizations go out and take readings, set up their equipment, and they read the wind speeds at a particular point so you can develop a swath of the wind in a particular region. then so every time we hit a building with wind, we're hitting it with a hurricane that actually
Alejandro Juárez Crawford (11:05)
So IBHS is doing the crash test dummy setup for homes in wind, right?
Alister (11:12)
Yeah, the dummy doesn't survive.
Alejandro Juárez Crawford (11:16)
You can do great. I mean, maybe you could produce sort of like those drivers ed videos, right? That if you take the course, you lower your insurance, you guys could do that for home ownership. silly.
Alister (11:16)
I
Yeah, so the science is meticulous. is. If you mentioned crash tests, dummies, that's our sister organization. That's IIHS, Institute for Highway Safety. So you've got building safety cars, automobiles, highway safety. Those are the two big not-for-profits that the insurance industry funds in the US. So it's all state of the
we are the we are basically the authority on on building safety from an engineering
Alejandro Juárez Crawford (12:01)
Now, can we actually zero in on a 30 from an engineering perspective, right? Where you, create the, the home with the wind resistance built in and a phrase you used just when you were opening up about the science and the implementation.
Alister (12:20)
So we'll test the signs, right? And so we side by side. We examine failure modes, things like do garage doors fail under what conditions? What was the structure? What was the difference between the two buildings that our hypothesis would be at this particular speed in this particular configuration, we would see a That's what we're testing for.
And so then we can figure out, how do we fix that so that that vulnerability mitigated? And so we go through this laborious process to figure all those things out. And then we codify all that into a standard. And so, Mim mentioned two programs that we have right now. One is the wind mitigation. It also includes hail, but it's primarily about wind, both from a hurricane perspective and from
Alejandro Juárez Crawford (12:57)
Mm.
Alister (13:10)
severe convective storm that you would see in the the in the Midwest and over towards the Rockies. So that's that's the fortified standard. So everything that we have researched that we have found to work that makes us structure stronger against wind is in that technical standard. So that's the blueprint for how you On the wildfire side, we have a prepared home. It is perhaps
people will understand this, but let me just put some numbers to to get a sat to get to draw comparison between the wind vulnerability and the wildfire vulnerability. You've just seen Hurricane Helene. So it's fresh mind. We've got some recency around this and you've seen take take the image of houses floating away because there was it was inundation of water. That's that's that's a different But you see houses where bits of the roof have been ripped off. Shingles are missing from the
from the roof, maybe a garage door has been punched in or whatever. The damage is not catastrophic.
the damage is generally partial. In other words, yes there can be catastrophic damage, course. If a category five hurricane comes in and hits you right bang on, yeah, you're not really going to have much of a chance there. But if it's a typical hurricane or storm and you're a little bit more inland where the wind speeds have slowed down a little bit because it's going over land,
Alejandro Juárez Crawford (14:18)
Mm.
Alister (14:42)
then you're going to see some damage but not a total loss, generally And so the size of the claim to repair that house is right, because you're And so put that there and then contrast that with wildfire.
With wildfire, 90 % of home ignitions are caused by Embers flying through the air, landing on the ground, igniting something combustible, wicks its way to the house, and there you go.
Those type of losses, when any building is ignited, there's about a 90 % chance it's going to be a total loss. But it's worse than that. Because if you look back in history, look at Coffee Park, look at Lahaina, look at any of the big wildfire events, the Camp Fire in 2018 is a horrible example of it, but it's pungent. But it really makes the point. It's not just one structure.
Alejandro Juárez Crawford (15:20)
Hmm.
Alister (15:41)
is the whole community.
Alejandro Juárez Crawford (15:42)
Mm. Mm.
Alister (15:44)
Once a structure is ignited, it produces structural embers. the wind will blow the flames towards us. We build houses pretty close to each other, especially in California. And so you end up with what's called a conflagration, which is a total loss not only of the house, but of the community. And so that size of problem is something that the insurance industry and homeowners really care about.
Alejandro Juárez Crawford (15:50)
Thanks.
Mm-hmm
Mm-hmm
Alister (16:14)
And just to really underscore this, in 2018, when you look at all of the disasters that happened that the insurance industry paid out on, so Camp Fire, Hurricane Michael, the typhoon in Japan, Hurricane Florence, and the Wesley Fire. Those were the big events in 2018. The Camp Fire was the costliest disaster in 2018.
Alejandro Juárez Crawford (16:39)
Mm-hmm.
Alister (16:42)
homeboy.
Mim Plavin-Masterman (16:43)
globally.
Alejandro Juárez Crawford (16:43)
Alistair, I want to pick up on this point you're making about losing the house versus losing the community. I was just having breakfast with a friend of mine who's a long time firefighter in Colorado. And she was showing me her own videos from the truck of one house lighting up, little blazes, the next house, and then these just waves of fire. Now, when things are changing, right, we know that we human beings
are terrible if it's not on the sample path we're used to at relating to the risk, right? If I'm a trader and I've never experienced a financial crisis, I'm taking this from the book Fooled by Randomness, then it's very hard for me to imagine that my existing strategies aren't gonna work. What I wanna ask you is about how you create the incentives when things are changing to build in the right way and in the right places.
Alister (17:40)
Yeah, it is the issue that keeps my team up every day on this. It's how do you get the message across in a way that is really effective. And I'm a little old school on this one. I like Smokey the Bear.
Alejandro Juárez Crawford (17:47)
Mm-hmm.
Mm-hmm.
Mm.
Alister (18:01)
But Smokey doesn't really kind of get in your face and tell you to do something.
You know, and in wildfire, it's kind of like this. There's no partial credit. You either pass or you fail. And passing means you've done everything that you need to do to mitigate the Embers will find the weak link. If you don't mitigate, if you don't pass the test, check all of the questions, get the right answer on each of those questions. You've just left a vulnerability that Embers will exploit.
Alejandro Juárez Crawford (18:14)
Hmm.
Mm-hmm. Mm-hmm.
Alister (18:37)
It's been a bad day.
Alejandro Juárez Crawford (18:38)
So what I'm hearing is you need to treat the syllabus the way MIM does. You need to read the whole thing, not just the first paragraph, but seriously, I'll never forget this conversation a year ago with a friend from Japan and a friend from Turkey. And as you know, in the big, this was actually a couple of years ago, there was a big earthquake in Turkey and many of the Turkish buildings, even though they had the codes, were not built according to code. So they just collapsed in the earthquake and the Japanese
have been extremely stringent about the enforcement of what you just said. Build the whole thing right. And I was very intrigued by that difference and how that gets implemented throughout a society and a set of industries. So maybe you could pick up on Smokey the Bear Ain't Enough and talk us through what would it take for folks with properties in Florida or the Carolinas to change how we're experiencing these things.
Alister (19:36)
Yeah, so the end result, the day that I no longer have a job and my partner Dr. Anne Cope, our chief engineer, no longer has a job is when we have building codes, strong building codes across the United States enforced, inspected and built carefully to those.
Alejandro Juárez Crawford (19:58)
So for listeners, our goal is Alistair joblessness. That's what we're really going for here.
Alister (20:01)
I want to hand that prospectus back to Raleigh and say job complete. Thank you. I'm going to the beach. But that's it.
Mim Plavin-Masterman (20:09)
I'm going to the beach.
Alejandro Juárez Crawford (20:10)
I mean, we live in a wind-protected, wildfire, well-designed building for hurricanes on the beach. Yeah.
Alister (20:15)
All right. So let's really take an example here that makes the point. I'll tell you is, if you go to lower Alabama, right? And I love the fact that it's lower Alabama, because I get to talk about one of the states that's normally ranked at the bottom of tables actually is right at the top. And they're right at the top because they have
through a code supplement in the lower two counties of Alabama that all structures be built to the fortified gold standard. So that's the structural standard. That's the ability to withstand hurricanes. And they are inspected. So there's one thing to have a code that says that thou shalt do X, and Z. That's another for someone to come behind and say did you actually do X, and Z properly.
Alejandro Juárez Crawford (21:03)
Mmm. Mmm.
Alister (21:07)
right so you got to have both of those things in place. Alabama, Lower Alabama is an example of a strong building code that is enforced. Houses in that market, there's a report that came out and I think it was updated last year from the University of Alabama which specifically looked at what was the value increase in the real estate from building to that standard.
based on real houses, real sales, what was the percentage increase just from that alone? And I don't know what the new number is, but the old number was 7%. So 7 % increase. So not only does your house kind of be able to withstand the elements, you're actually getting an increase in your value too. Now, that's the best example. And in Alabama, we have...
Alejandro Juárez Crawford (21:49)
Mm.
Mm-hmm.
Alister (22:04)
Now about 50,000 structures that are built to that standard and certified. So there's a piece of paper that says IBHS says that this house was built to the standard correctly. And that's something that insurance companies will bank because it lowers the risk.
Alejandro Juárez Crawford (22:22)
feel as if you've given us a really interesting what if instead here, you teed this up, talking about folks who are sensitive about saying something critical about enforcement in Texas, right? And of course we all have the phrase in our heads, don't mess with Texas. But what you're doing here is very interesting. You're saying, maybe we change our idea from don't criticize us to criticize our system of enforcement. Think more about Alabama so that
Alister (22:26)
Mm-hmm.
Alejandro Juárez Crawford (22:51)
we begin to not just have the code but enforce the code. In other words, the what if instead perhaps is stop saying just don't say bad things about the way we're doing things. Instead, say a lot of criticism about the way we're doing things. So we actually, if we don't want to mess with Texas, we need to get it right.
Alister (23:08)
has now started to to consider should they be doing more in the code space. They've had a lot of hurricanes. Look at Harvey. Look at other ones that came in. And so there's a recognition there. And there is a fierce independence. And thou shalt not tell me what to do that persists in that culture. You could build just a contrast. Right. So lower Alabama fortified gold standard certified.
be there. In Texas, you could build a house out of matchsticks and tin foil and you would be compliant with the code.
Alejandro Juárez Crawford (23:41)
Mm-hmm and culturally this don't tell me what to do thing is really interesting. I mean I have cabins in the woods and For me, I'll admit this. I don't want anyone telling me my my neighbor built an Adirondack fire tower against code at the edge of a cliff and tells this incredible story about how when the code person came and it was sort of a complete right it was a done deal like
getting eventually the approvals and this sort of thing. I'm oversimplifying this story. But the point is, and when I hear that story, I'm like, yeah, I can't believe they would have stopped you from building this tower in this amazing place, right? That's that fierce independence. How do you think about, right, when we have those values of don't tell me what to do, which I have very strongly, right? How do you think about, yeah, but we need to put some teeth in these things.
So we don't keep repeating these patterns that put whole communities at risk.
Alister (24:40)
So and stick. Personally, I like the stick. It's not to say there aren't good, tasty carrots around, but they're a little hard. They're defined. And not everyone likes
ever of implementing mitigation in the United States other than smoking, which is probably one of the best, is seat So seat belts were designed, the insurance industry and auto manufacturers agreed this was a good thing, and so they created these seat belts, their efficacy was measured by the insurance industry, IIHS, and the states were asked to adopt these.
the enforcement of seat belts. And they didn't. So the federal government brought out the stick and said, if you want funding for your highways, you're going to enforce seat belt law. And that's how it happened. There was a credible direct consequence on everyone if you didn't comply. Now some people are going to say, libertarians, they're going to have some indigestion around that. I get it.
but it is effective. And so that's.
Alejandro Juárez Crawford (25:55)
But you're asking what freedom is, aren't you? You're asking, is my freedom not to have a multi-car pileup where everybody dies, or in this case, a wildfire that knocks out the whole community? Because that's freedom. I want freedom not to have that wildfire. Or is my freedom to build against code like the Turkish builders that built the buildings that collapsed in the earthquakes? And it's very interesting what you've done because I can care about my freedom, right? I can be fiercely independent.
Alister (26:22)
Mm-hmm.
Alejandro Juárez Crawford (26:25)
but we end up having to think about some things that affect my freedom in different ways.
Alister (26:31)
Yeah, and so, you know, that's the extreme example in terms of the steak. On the carrot side, just to give you a well-rounded view of this.
I'll tell you a story about when I was in middle school in Scotland and my French teacher Mr. Payne, yes that was his name, Mr. Payne, he one afternoon his brother is a psychologist so one afternoon he looked around
Mim Plavin-Masterman (26:52)
great name for a French teacher.
Alejandro Juárez Crawford (26:59)
He should have been Dr. Pain. Was his brother Dr. Pain? Because that's even better. Just saying.
Alister (27:01)
Let's go with that. So Dr. Payne looked around the class and there was no energy in the classroom at all. And he's like, okay, I'll be real here. So he started talking about cigarettes.
Alejandro Juárez Crawford (27:06)
Yeah
Alister (27:18)
And so you got people that are kids that are 11, 12 years old. And Mr. Payne's talking about how your parents are going to die because they smoke cigarettes. And there's a secondary effect on you too. And that's not a very considerate thing to be doing. So he went on about this for a whole period. And everyone was sitting there, you're 11, 12 years old and talking about death.
and recognizing something that your parents made do and directly connecting the things together, it was horrifying.
Alejandro Juárez Crawford (27:48)
Mm.
Mm-hmm.
Alister (27:53)
came back to our French lesson later in the week and Dr. Death, Dr. Payne, did say, okay, how many of you talked to your parents about cigarette smoking this week? What percentage of the class do you think that had parents that smoked cigarettes, what percentage do you think actually said yes, I did talk
Thank you guys.
Mim Plavin-Masterman (28:18)
I'm gonna go with half.
Alejandro Juárez Crawford (28:21)
63%.
Alister (28:23)
over 90 percent.
Mim Plavin-Masterman (28:24)
Wow.
Alister (28:26)
Middle schoolers are magic because they're interested, they're curious, they like to talk, they're very connected with their parents. And so my theory is replicate Mr. Payne's experiment with wildfire through middle schoolers. Get the resources together to form that basic education about how you mitigate wildfire.
and get that into some small capsule that a middle school teacher can pick up as a free resource and build into their curriculum. Because they've got a fair amount of flexibility. It's not like the high school level. It's much more regimented. And so that's my thought is if we can find ways to get that message through people that will be active promoters of it because they are scared and they want to help and they want to make better and they don't want anything bad to happen to their family, that is a really effective way, I think.
getting the message out. So, carrot stick and you end up with a majority. So, your original question was around those two programs. Ultimately, those programs exist not to canvas the whole United States in Welfare Prepared Homes and Fortified Homes. We've run these programs so that when there is a bad day, like Hurricane Sally and you have
20,000 plus houses in the path of sadly in lower Alabama and the loss ratios on those houses is much smaller than the houses that are not mitigated. You have just demonstrated the value, irrefutably demonstrated the value of that mitigation. You have lowered the risk and everyone knows risk has a price. When you lower the risk, the price comes down.
In this case, it's the price of your insurance.
Mim Plavin-Masterman (30:23)
have an observation and then a question on this. So there's building to code and then there's building to code plus, because this is what you're doing is an enhancement to the code specifically for Wind and Wildfire. So how much more expensive is it for a builder to build to this code plus? And then what does that translate into an increased?
price of the house. The reason I'm asking is if we think about the demand coming indirectly through the buyer, how much more am I willing to spend for a house that's wildfire resistant? I'm just curious what those numbers look like.
Alister (31:01)
Yes, so let me give you the wind side because we have start there and then wild farts is a little bit of a different beast. But on the wind side, if you're building two, so there's three levels on the wind side. There's a roof level. There's a, and they build on each other. So there's roof and then there's roof and openings. Openings being windows, garage doors, the gable and vents, that kind of thing. And then the third level is gold, which is roof.
openings and structural integrity. Now, what's involved with structural integrity? You're basically connecting the roof to the walls, the walls to the foundation in a way that can resist the pressure that the wind brings to it when it gusts. And so you transfer the loads down through the roof, through the walls, into the foundation, into the ground. So nothing resists the wind. You're just moving
pressure somewhere else. You accomplish that with ties, metal ties, hurricane straps, things like that. It's not expensive. You just put them in the right place and the right number of them fastened in the correct way. That's a very simple thing and an inexpensive thing to do. On the garage doors, would be required to get a high-wind pressure-rated, high-pressure-rated garage door.
If you look, I'd encourage anyone that's watching footage of the aftermath of a look at the houses and look where the garage door is missing. And look at the roof that's directly above that garage door. I guarantee you, in most cases, that roof is gone.
And the reason for that is the garage door fails at maybe 50, 60 miles an hour because it's not designed to withstand high wind. And you've just punched a hole in your house. Your house is now a balloon. And the wind is blowing into that garage and it is pushing out the walls. Meanwhile, the Bernoulli effect, is what, you he gets the planes in there, is working on the roof and it's pulling up the roof.
Alejandro Juárez Crawford (32:59)
Hmm.
Alister (33:23)
So you've got pushing out the walls, pushing out the ceiling, and pulling up on the top of the roof. And it pops the roof.
All because the garage door wasn't sufficient. And for $300 or so more, you could have had a pressure rated garage door that would have withstood that. Instead, you've now got a big problem, which is a missing roof and a missing car.
Alejandro Juárez Crawford (33:47)
You're making me think about over-engineering engineering just enough so that it can last for a little while with the vulnerable parts cheap because we weren't planning for these rare United States, when you look at things from the 50s, right?
things that were built in the first half of the 20th century, they're built to withstand a lot of situations. And we're all MBAs, right? And in many ways, business school trained people to engineer things just enough for a set of events that don't always include the extreme event. How are you thinking about that in terms of this need to change?
so that the vulnerable parts, as you just described, I've got a new version of the beginning of the Wizard of Oz in my mind as you speak, right, where they're forensically looking at the garage door and this sort of thing from Dorothy's house and Oz. But seriously, how do we get into that in a way that can change how we engineer things? It's a long question, but really it's a short prompt in the end.
Mim Plavin-Masterman (34:41)
you
Alister (34:57)
So in the wind space, it is much more deterministic. It's engineering, it's math. Load on a building is a function of wind speed, and then how have you constructed the building to withstand to deal with those kind of loads. You can measure all that stuff and you can design wherever you want. We typically...
Alejandro Juárez Crawford (35:19)
Mm-hmm.
Alister (35:22)
We designed for high-end hurricanes. Now, we're not designing for a direct hit from like a hurricane Michael, a direct hit right there on the coast before it's even a chance to slow down. Most hurricanes do slow down by the time they get to the building stock unless they're right there on the coast because the minute it touches land, it starts to lose its energy. So the hurricane kind of slows down.
Alejandro Juárez Crawford (35:26)
Mm-hmm.
Mm-hmm. Great, right.
Alister (35:49)
So most of the impacts that you see are in that kind of like 100 to 130 mile an hour range. And that's kind of the sweet spot that we all bring. We have a safety factor because we are engineers. Well, I'm not an engineer, but the engineers have safety factors in there because on a bad day, the math isn't going to hold up to the actual conditions that you saw. So they all put a safety factor in what gives you that buffer.
above the design level and that's how they go about setting how much resistance there is. Now on the wildfire side of things it's a lot different. Say it's the pass fail and there if you're, we can't do justice to it here today but if you go on wildfireprepare.org.org not .com you'll see exactly what's required.
Alejandro Juárez Crawford (36:19)
Right.
Mm, right.
Alister (36:47)
But it comes down to this, you are removing vulnerabilities. So vulnerabilities are things that can catch fire. So, and the one big one, which goes back to your, how do you persuade people to do this? One big one is you create a buffer around your house, a non-combustible buffer, five feet. Nothing in that five feet.
Alejandro Juárez Crawford (36:56)
Mmm.
Mm-hmm
Mm-hmm.
Mmm.
Alister (37:17)
can be combustible because when embers float through the air and land, hit the side of the house or they land in that zero to five range, they're just going to burn out. There's nothing there. But if there's a boxwood there underneath the window and enough embers get there to ignite the boxwood and the boxwood puts up flames shooting up that then cracks the window and the flame goes through and catches the curtain and the inside of house is gone. Then the whole house is gone because you had something in that zero to five that an ember
hands-on. That's why it's a pass fail. You've got to do all of that. So the zero to five is a big one and then there things you need to do with vents to stop embers from getting into the vent. You can go to various levels, non-combustible siding, that kind of thing. And it comes down a lot to, on the cost side of things, what materials do you want to use? Do you want to just move everything that's combustible plants, etc., just move them five feet out?
Alejandro Juárez Crawford (37:48)
Right.
Right.
Alister (38:16)
That would be what I would do if I had the space to do it. The plants would probably grow better if they're away from the side of the house, right? You're going to get sun and all of that. And you don't have to water the side of your house. You could actually water the plant.
Alejandro Juárez Crawford (38:25)
Yeah.
But this goes back to the point you've made about adoption, right? About what can get, and I want to actually relate it to your mention of middle schoolers with that 90 % and smoking. You've talked about bad days and buffers, Alastair. Bad days, we're very bad at thinking about. We don't usually build for bad days. And now you're saying build buffers. So beyond Smokey Bear, beyond even carrots and sticks,
in a moment where right now there are public figures saying if there's such a thing about as climate change, well, don't worry, we do things best in America. Answer over. You're saying there's an open question about how we're going to do things in America, in every community, in every one of the states you're mentioning. how can help us think about is it the middle schoolers?
What could we do? Just let's do the what if instead and imagine for a moment that within this decade, the United States, I'm just going to focus on the United States for a minute and we can apply this to any other part of the world is going to become a little more like Japan when it comes to earthquakes. We are going to incentivize. We're going to use all the carrots and sticks to enable ourselves to build in the right places in the right ways so that we're not just every.
few months having these horrific news stories, maybe even every few Can you give us a, what does that world look like and how do we get there for a moment?
Alister (40:03)
Yeah, so the code path is whack-a-mole because there are codes that can be written and adopted at state level. But the story doesn't stop there. Just because you've adopted a code at the state level does not mean that all the code jurisdictions, the municipalities, the counties, etc. within the state have adopted.
So some states, and I won't name them, you can go look on IBHS.org, look up Rating the States as one of our premier products, and we rate the states according to their code, Adoption Enforcement. It's quite enlightening. It's a good read to the media. It loves it when we point out some of the states that have some homework to do. so you've got that, happily adopted it, and then now happily put the resources behind it to enforce it, right? So that is the long road.
Alejandro Juárez Crawford (40:59)
Yeah.
Alister (41:03)
to get all of that. That's why my job is safe for a while. On the other side of things, and people I don't know how they think about the insurance industry, the insurance industry is basically gamblers, right? They are taking risk and seeing how it plays out. And on a good day, they make money. On a bad day, like the campfire, they lose a boatload of money.
Alejandro Juárez Crawford (41:30)
Cut to blackjack table to Alistair's right. Yes, go ahead. Alistair's right.
Mim Plavin-Masterman (41:32)
you
Alister (41:35)
I mean it's a little bit crass analogy, but they are in the business of pricing risk. It's the risk that MIM is going to have in, sorry, pick on you here MIM, but the risk that MIM is going to have in an automobile accident. What is the probability of that given all the factors we have, the information we have about how? Well, it's the same on wildfire for example, right? If a house is mitigated and enforced,
so that you have a certificate that says IBHS gave you a wildfire prepared home certificate, well then you've just affected the And at some point, a couple of things could happen. And I don't speak on behalf of any individual insurance company in general, I'm just making a general observation here based on business background, is if I'm in the risk taking business, I get to select my risks.
So if I'm in the insurance industry, I'm about risk selection. So what are the risks that I want to take that turn into insurance policies with a promise to pay out under certain conditions? That's my business, is selecting those risks based on geography, based on codes, based on da-da-da-da.
Alejandro Juárez Crawford (42:41)
Mm. Mm.
Alister (42:48)
At some point, effects of climate and the lack of action on the part of local state government may lead me to say, you know what? I'm not really interested in taking those risks for houses that are not mitigated. Someone else can do that. I'm not interested. And what happens in that case is the state can
Alejandro Juárez Crawford (43:07)
Mmm.
Alister (43:15)
The state, well it's not actually a state entity. It's a not-for-profit entity that is established by state law. I think I'm correct in saying that. And it's called the fear plan. It was originally designed for after the riots that happened in Los Angeles to provide some coverage should that happen again. They only cover fire and riot. That's what the fear plan does. It's very expensive and the coverage is not very
and customer service is not gold standard. So your option in that case is if you haven't mitigated, what are your options? You're shopping for a company that's going to ensure your risk that you haven't mitigated, so that your mortgage holder, if you have a mortgage, is satisfied that you've got enough insurance in place, so when there's a bad day, they don't lose money.
the stick side. The flip side of that is I communicate with my policyholders and I say, you know, I'm really interested in houses that are mitigated. If you go ahead and get that, might, it's a good chance that I'll write you. So it's an invitation rather than an enforcement and both can be true at the same time.
Alejandro Juárez Crawford (44:27)
Hmm.
Mim Plavin-Masterman (44:32)
So a couple of things to follow up on that. My understanding from when we spoke earlier is that not every house can even be mitigated. Like if you have an old house, there are these older structures around, it's actually quite difficult to, it's quite difficult to mitigate some of that for a hundred year old farmhouse or an apartment building in some parts of the country. So that was my, that's sort of the first point. The second point would be,
that because of warming temperatures, the wind drop in speed for hurricanes, it is actually getting smaller. Like your point about hurricanes lose power when they come inland. There's an article I actually read in preparation for this. They used to lose about three quarters of their destructiveness when they moved inland. Now they're losing about half because they're warmer. So like every seven degrees Celsius increase in temperature,
lets the air hold 7 % more water vapor. So they're able to like kind of take a fuel pack with them for longer and move it inland more, which is a lead up to my second question of shouldn't we be thinking about climate vulnerabilities in a broader way if we know that these storms can like move further inland and do more damage in places that we don't traditionally think of as being vulnerable?
So like your job is really safe because there are way more houses potentially at risk.
Alister (46:00)
So let me answer the second question first, then I'll come back to the first one. There is good news on the geographic coverage of mitigation. And my favorite state comes up again, which is Alabama. And they're not the only one. Other states have done this too. But what they do is they sell an endorsement.
for your policy. a very small endorsement, doesn't cost a lot of money. But what that endorsement does, says when we, insurance company, are going to pay to replace your roof, the endorsement will pay for the upgrade to a fortified.
which is a great way of over time getting adoption without a homeowner having to stick their hands in their pockets and pull out a bunch of cash, which we know won't happen.
I don't know many people in the average walk of life who have personally paid for a replacement to the roof absent and checked from the insurance company.
30 % of the asphalt jingles that are sold in the United States are bought by the insurance industry. 30%.
Alejandro Juárez Crawford (47:16)
Hmm.
Alister (47:16)
the good news is that these endorsements are available away from the hurricane coast. So in the whole state of Alabama, you could get that endorsement. And that's a way of spreading to proactively combat some of the effects of climate change. So the insurance industry deserves recognition for doing that because there aren't many examples, especially the
government level. Your first question was about some of these older houses. Are all houses able to be mitigated? And the answer is yes, but. And the yes is, if you have the will to do that, you can do it.
You can retrofit, so we have two levels in the program. One is the base level, and that is designed for retrofits. It's 98 % of the building stock, right? And houses are ready built. You can retrofit to the base level standard. that's the the big thing is the zero to five, that buffer around the house. You've got to have that.
combustible siding, wood siding, things like that, that's okay. Because what we're doing is we're mitigating against the chance of ember ignition. And ember ignition doesn't typically happen on the wall. It happens down at the joint of the wall and the ground where they can accumulate and then start fires there. So you can do the existing stock base level. Gives you a degree of protection from embers. If you're doing a new build,
you can build to the plus level which protects against embers, direct flame and radiant heat. So it's all three of those. You could retrofit to that plus level but that to your point, that's pretty expensive because you have to replace windows, have to replace siding and not many people are interested.
Mim Plavin-Masterman (49:23)
Right, it would seem so, yeah.
Alejandro Juárez Crawford (49:31)
Maybe I should allow the fire engine sound that I just muted because it's appropriately on topic.
Mim Plavin-Masterman (49:34)
It's on brand.
Alister (49:39)
And that's another thing that I don't know that people really think about is if you're in the fire service, your primary job is not to protect structures, it's to protect lives.
And given the limited resources that firefighters have, your house is pretty low down on the priority list in a big fire.
So you really are kind of on your own as far as mitigating your risk. But you've got to realize what it is. And you've to figure out how do I pass the test to get a passing grade. And how do I do that? You read them in syllabus, every single word.
Mim Plavin-Masterman (50:22)
you
Alejandro Juárez Crawford (50:24)
I love this. our takeaways folks are when it comes to fire, read the syllabus, the whole thing. But, seriously, as we bring this to a close, I want to try to pull out some, some takeaways and just, there's a few big ideas that you really make us think. And we do this thing when we're workshopping innovations and startups.
Mim Plavin-Masterman (50:31)
Okay, my students, if you're listening, heard it. It's not just from me, okay.
Alejandro Juárez Crawford (50:54)
where we train the folks involved in doing the workshop. Let's say they're working on their prototyping and testing or something like that. And we say, they're used to being in a situation where when they're helping a peer, they're supposed to say something nice. They're supposed to compliment it. They're like, you did a great. We try to train them that if you like it, if you like what they're trying to do, you poke holes. Excuse me.
If you like it, poke holes. If you like it, push at it. If you like it, find all the problems you can find. Right? And it's been this strange thread through what you've said, Alastair, as we've talked about, you know, the sensitivity of saying, this state's doing it well, this state isn't, that we're driven by pride in how we have done things, but maybe we need to place that pride not in where we've been, but in what we do. So...
If we could just use that as a frame, we want, and whether it's the United States where you work primarily as I understand it or another, we wanna be proud, right? How do we take that pride and put it into the way we treat homeowners, the way we deal with regulation, the way we deal with communities? I'm really curious. If I want to be the proud municipality, what do we do?
Alister (52:13)
You familiar with Bowling Alone? Robert Putnam's book? The Demise of I Look After My Neighbor? I Enjoy Time with My Neighbor? That's what's going on. The Pride of...
Alejandro Juárez Crawford (52:17)
Yes, sir.
Alister (52:28)
I am no longer a problem to my neighbor because I have mitigated the risk of wildfire in my house. And so the chance that my house is going to catch fire and then ignite your house is a lot lower. And I'm very proud of what I have done for my community and my neighbors.
Alejandro Juárez Crawford (52:46)
So just like the image of an Amish firefighting community where folks, right, we don't have mechanized firefighting, so we all come together to save the house. We need to apply that image to how we prepare for fires, for storms.
Mim Plavin-Masterman (52:50)
you
Alister (53:03)
We live in communities and we act as individuals.
Mim Plavin-Masterman (53:07)
It's the tragedy of the commons. I mean, you're trying to invert the tragedy of the commons in what you're doing. Yeah.
Alister (53:12)
You're bowling alone.
Alejandro Juárez Crawford (53:15)
But what I appreciate about what you've just done is it's not just, well, forget about it. There's nothing we can do. There are so many examples, starting with that Amish community trying to put out a fire without mechanized tools, right? There are so many examples of how we have been successful at being a community. I think what makes this challenging is that it's changing circumstances, right?
and it's a risk pattern we haven't seen. It's not on the sample path that we've been used to, even if we're seeing it a lot now. So how do we form the community practices for this new reality that we're in and that is accelerating?
Alister (54:02)
pace of adopting frameworks that provide for mitigation across the states is accelerating. So I paint the picture of Bowling Alone to say that's how individuals I feel like all too often perhaps think about the use of their scarce resources to doing something to help a greater cause.
Right? That's the bit. Meanwhile, insurance commissioners, governors, and others are looking at the benefit of mitigation in states like when Hurricane Ian came in, the new building code, which is almost fortified, performed really well. It was another proof point. And then they see what happened in Hurricane Sally with the
Alejandro Juárez Crawford (54:53)
Hmm.
Alister (54:57)
severity and frequency of claims there. And so these proofblots kind of come together and it's kind of, it's shifting from I'm going to be a leader in my state and put in place legislation that allows for insurance regulation that allows for recognition of these programs. It's gone from being the leader to I want to do that too. I don't want to get left behind. And I'm saying that a little comically, but it's true because I see
Alejandro Juárez Crawford (55:14)
Mmm.
Alister (55:25)
states like Missouri and others, they're putting in place legislation to allow charting the path towards this type of program. So there is some acceleration.
Alejandro Juárez Crawford (55:36)
And with that said, let's close with a word to that middle schooler or someone who cares about a middle schooler, right? Just as the 90 % talk to their parents about smoking risk, what would you say to that middle schooler or that parent who cares about their middle schooler? If you could say one summary idea.
Alister (55:56)
Wildfire mitigation is not hard. You can teach your parents.
Alejandro Juárez Crawford (56:01)
As it happens, 63 % of our listeners are middle schoolers. That's a fake fact, but everything else we've done here is true. Alastair, thank you so very much for joining us. You've taught me a lot, but also given us some things I think we can use. Thanks for being on What If Instead.
Mim Plavin-Masterman (56:09)
you
Alister (56:23)
Thank you for inviting me.