While forward-looking models may help insurers regain financial footing, consumer advocacy groups worry about a lack of transparency in how these tools calculate risk. Critics argue that proprietary algorithms—sometimes called “black boxes”—allow insurers to justify price hikes without clear accountability. Homeowners in wildfire-prone areas are particularly concerned, as these changes could lead to substantial premium increases.
Additionally, critics of the Sustainable Insurance Strategy note gaps in its implementation, including no binding requirements for insurers to increase policy offerings in underserved regions. Provisions encouraging companies to cover up to 85% of their market share in wildfire-prone areas are discretionary rather than mandatory.
