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How understanding high-performing fire departments can help insurers

By Hugh Gibson  |  December 10, 2018

ISO’s Community Hazard Mitigation works closely with fire departments and communities through our Public Protection Classification (PPC®) program, which develops classification of community fire suppression capabilities on a scale of 1 (exemplary) to 10.

Using PPC ratings

Many Insurers use PPC ratings as a measure of the risk of fire losses in a community, an important item to consider when determining premiums for property insurance.

Fire departments that have achieved higher PPC ratings have generally established procedures, processes, and best practices that can serve as examples to other communities. By understanding what these methods are and having a measurement tool for the degree in which fire departments implement them, insurers can better assess fire suppression abilities in related communities and get a clearer picture of fire risk before issuing a policy. 

Accreditations and ISO ratings

It’s often the case that a fire department that achieves a high PPC rating has done well enough to earn accreditation from other groups, such as the Commission on Fire Accreditation International (CFAI). Those accreditations are strong indicators that a fire department has a philosophy of continuous improvement. That’s important, because such a creed requires performing an assessment of the risks and vulnerabilities in the community, determining the standards of response performance to mitigate those risks, and measuring performance in an ongoing manner to ensure those standards are being maintained.

The use of data analysis

In ISO’s experience, high-performing fire departments generally are data-driven organizations, with programs developed based on what they learn through data analysis. They use these programs to foster better fire prevention and more efficient firefighting methods—all ways of reducing risk in a community, providing additional information for insurers to consider when covering a risk.

One example is the Henrico County (Virginia) Division of Fire, a PPC Class 1 department accredited by CFAI. For one of its data assessment programs, the fire department analyzed properties with the highest known risk factors to predict which ones lacked working smoke alarms—and did so with 89 percent accuracy. The fire department installed smoke alarms in nearly 2,000 homes that didn’t have a working detector, mitigating a huge amount of risk. The homes were registered in a database, allowing for future follow-up.  

Future risks and challenges

Many of the challenges that fire departments face have evolved in recent years, and that trend shows no sign of stopping. Forward-thinking fire services anticipate and plan for such changes, and insurers need to be ready to face them, too. Here are some examples:

  • Expansion of call types: One of the biggest changes is a need to respond to an ever-increasing range of all-hazards risks. Fire departments are being called for nonemergency, low-acuity medical calls usually classified as primary healthcare needs. Underwriters should note this trend because it affects firefighting resources.
  • Younger workforce: The fire service is developing a younger workforce. Add to that the fact that fire frequency is down, according to statistics from the Federal Emergency Management Agency (FEMA), and that can mean a lack of actual firefighting experience. That said, the top-ranked PPC fire departments report that they have raised the bar in terms of the qualifications and characteristics for entry-level firefighters. As a result, there is a more diverse workforce entering the fire service, with a wider range of backgrounds, occupational/vocational skills, education, military service, demographics, and more. New employees, especially at top tier fire departments, are smart, motivated, and dedicated. Those factors may go a long way to mitigate their lack of experience.
  • Fire severity is up: FEMA also reports that although fire frequency is down, fire severity is up. Fire departments are seeing residential fires that burn much faster and hotter than in the past, leading to more dangerous conditions, unique hazards, and increased risk of loss. The reason for the increase in fire severity appears to correspond, to some degree, with changes in construction practices and the materials used in furnishing homes. Therefore, FEMA statistics show that civilian fire injuries, deaths, and property losses are trending upwards despite the decrease in the number of residential fires. Insurers must understand this unfortunate fact as structure fires may result in more severe losses per fire.

Insurers should be aware of which fire departments address these trends and carefully define and prioritize core roles and services to be sure they’re firefighters are properly positioned, effectively trained, and ready to roll when a life- or property-threatening emergency exists. Those are important considerations when measuring risk in a community.


Hugh Gibson is a project manager for ISO Commercial Lines Field Operations-Community Mitigation. You can contact him at hgibson@iso.com.

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