Exclusive Interview: Stephen Bennett, Head of Climate and Catastrophe science, mercury Insurance

Interview:  Stephen Bennett, Head of Climate and Catastrophe Science, Mercury Insurance

By: Megan Kuczynski, CEO, ClimateTech Connect & Author, Risk2Resilience

MK: Steve, it was great to have you onstage at the 2nd Annual ClimateTech Connect this past April! I have a fun fact to share with you.  You were the first person to register for the inaugural ClimateTech Connect conference in 2025.  The “firsts” are incredibly meaningful to our founding team and we have saved that registration!  We value you very much as a speaker and advisor to CTC.

You have a fascinating background spanning science, academia and industry. As Head of Climate and Catastrophe Science for Mercury Insurance, I have heard you say “Insurance should drive resilience, not retreat.” Mercury is certainly taking a different approach by promoting and rewarding risk mitigation.  Let’s spotlight wildfire.  At ClimateTech Connect, you participated on an all star panel, Shaping the Future of Wildfire Resilience including:

• Garrett Bradford, Principal and GIS Consultant, Milliman
• Derrick Davis, Principal Risk Analyst, PG&E
• Justin Schulte, Director of Climate Statistics, KatRisk
• Dave Winnacker, Co-founder and Chief Wildfire Officer, Xyloplan
• 
  

Can you share with our audience some of the insights and takeaways from this session? 

SB: Thanks, Megan. I applaud you and your team for bringing these issues to the forefront and for creating a platform for conversations like this.

My biggest takeaway from the session was that real resilience is not a slogan or a branding exercise. It is an ecosystem.

As an insurer, my colleagues at Mercury and I keep coming back to one basic question: which actions actually produce measurable risk reduction, and how confident are we in how those actions change losses over time? That question is increasingly shaping our strategy. We are trying to get better not only at measuring fire risk, but also at understanding which mitigation actions can meaningfully change outcomes for homeowners and their communities. A lot gets labeled as mitigation, but the real question is what materially changes loss outcomes, for whom, and under what conditions. That is what made the panel discussion so useful. Each perspective illuminated a different part of that challenge.

Our modeling discussion started the dialogue. As Justin from KatRisk made clear, catastrophe models are very good at helping insurers understand aggregate portfolio risk and inform decisions around pricing, capital, and reinsurance. Historically, however, they have been less focused on mitigation at a scale that can capture interconnected hazards like community fire, where mitigating one home, or failing to, can directly change the probability of loss at the next home and beyond.

That is where Dave's points about community-spread fire behavior modeling came in. From Xyloplan’s perspective, if we want to understand resilience in a practical way, we need better tools to represent how fire enters a community, how it moves from structure to structure, and which interventions are most likely to break that chain of destruction. I think that is one of the most important frontiers in wildfire risk right now.

Derrick's perspective from PG&E connects here. Utilities are understandably very focused on preventing ignition, and that work matters enormously. But Derrick also helped reinforce that resilience cannot stop at ignition prevention alone. Utility planning, infrastructure corridors, vegetation strategy, and coordination with communities can all become part of a broader resilience system when those capabilities are aligned with the rest of the ecosystem.

The other major point for me was that resilience will not scale unless it connects to what matters most in a given community. The incentives have to align with what residents, local leaders, and property owners actually care about, whether that is safety, insurability, affordability, continuity, or recovery.

Garrett kept bringing us back to the same point: wildfire resilience is ultimately about protecting people's homes, and it has to be approached as a cross-sector challenge rather than a siloed one.

The broader point was that no single institution can solve this alone. Insurers, utilities, modelers, mitigation practitioners, local governments, and community organizations each see a different part of the problem. Real progress comes when those perspectives are connected in a way that turns mitigation into something measurable, decision-useful, and actionable.

MK: You recently wrote, “the future of wildfire insurance cannot be only about selecting, pricing or transferring risk. It has to be about reducing risk”. This is a major paradigm shift in how the insurance industry traditionally thinks and acts. Mercury’s strategic investment in BurnBot, a wildfire mitigation technology company, is a perfect example of this value. Talk about walking the walk! Mercury is investing in physical risk reduction, not just pricing and portfolio management. 

Can you share your vision for this partnership with our readers? How do you see this template scaling? Do you think it could be a playbook for other P&C insurers to follow in high exposure areas in the U.S. and around the world?

SB: We see this partnership as part of a broader effort to help evolve wildfire insurance from a reactive model toward a proactive one that supports practical risk reduction on the ground.

For Mercury, this partnership is about advancing practical mitigation that can measurably protect homes and reduce losses. When mitigation works, homeowners benefit through greater peace of mind and a better protected home, communities benefit through more available and affordable insurance, and insurers benefit from a healthier market over time. That is what makes this so important. When it is grounded in measurable risk reduction, it can be a genuine win for policyholders, communities, and insurers.

What makes BurnBot especially interesting is that they are working in the physical world. They are not just offering a narrative about resilience. They are in the field managing burnable fuels for high-risk communities. BurnBot is creating the opportunity to connect mitigation, modeling, and insurance in a very practical way.

Let me be clear, insurers will not become land managers. The partnership model is what should scale. Insurers can help identify where mitigation matters most, evaluate whether the program is measurably reducing risk and losses, and in some cases help catalyze the work. But real scale will also require local governments, fire agencies, utilities, community groups, and outside capital, whether through HOAs, grants, public-private pilots, or county and state partnerships.

So yes, I do think this can become part of a broader playbook for P&C insurers. It is a framework for using data, mitigation, and partnerships to pursue measurable risk reduction and better outcomes for policyholders and communities. The exact form will vary by geography, fuel type, regulatory environment, and community structure, but the core idea is transferable: a more sustainable future in high-risk areas will require insurers to think not only about selecting, pricing, and transferring risk, but also about how risk can be reduced over time.

MK:  We're witnessing a fundamental shift in the catastrophe landscape. According to the Swiss Re Institute, secondary perils—including severe convective storms, wildfires, and floods—accounted for a record 92% of global insured catastrophe losses in 2025. Historically viewed as more manageable and localized risks, these events are now driving the majority of insured losses.

Steve,  how do you see emerging technologies—particularly AI, machine learning, and advanced climate analytics—transforming our ability to anticipate, mitigate, and ultimately prevent losses from these increasingly costly secondary perils? 

SB: I would start by pushing back on the label "secondary perils." When severe convective storms and wildfires are driving significant insured losses, they are very much primary perils.

What AI, machine learning, and advanced climate analytics can do is help us get more specific, hyper-local, faster, and more proactive. They make it much more practical to identify patterns, test many different scenarios quickly, and see where losses are likely to concentrate, where mitigation is most likely to matter, and where earlier action could prevent a bad outcome.

But we must remember that these are physical systems. In wildfire, storm, and flood, we are not asking AI to reproduce the physical science. We are using it to organize large amounts of data, scale the analysis, and sharpen decisions within a framework grounded in hazard physics and real loss mechanisms.

So to me, the promise of these technologies is not technology for its own sake. It is the ability to spot risk earlier, be proactive, target mitigation more effectively, and prevent more losses before they happen. Ultimately this makes for safer communities. 

MK:  We are You are actively involved as a mentor and adjunct professor with the brilliant students and faculty at the Institute for Risk Management and Insurance Innovation (IRMII) at UNC Chapel Hill. Why is it so important for industry to partner with academia? What advice do you have for the next generation of risk and resilience leaders?

SB: Megan, thank you for recognizing this connection. This matters a lot to me. I am genuinely grateful that UNC and Mercury are both willing to invest in a vision that too few universities and companies share. Building real connections among students, researchers, and practitioners is what matters most.

To me, that is the point of partnerships like this. Academia is strongest when it stays close to real problems, and industry is strongest when it stays connected to scientific frontiers and emerging talent.

What I value about UNC-IRMII is that it brings those worlds together in a practical way. Students get exposure to real decisions, real constraints, and real problems shaping the industry today. Industry benefits from fresh thinking, technical rigor, and new perspectives.

That is how you build the next generation. You give students real problems to work on, real people to learn from, and real relationships that help them grow.

My advice to students is simple. Get really good at something; go deep. At the same time, stay curious and learn from people outside your lane. Learn how decisions actually get made. And learn how to explain your work to people who do not think like you.  Build your network early and keep investing in it. If you do not have one yet, go find one or start building one. That is not superficial. The people you meet will shape what you learn, the opportunities you see, and in many cases the future you build for yourself and your family. This work is ultimately about protecting people, homes, communities, and livelihoods. If you can connect strong science to useful action, you can make a real difference.

About Stephen Bennett:  Stephen Bennett has focused his career helping people and organizations understand and prepare for extreme weather and climate risk. He focuses on making science useful—connecting data, decisions, and action in ways that advance sophisticated business decisions. As Head of Climate and Catastrophe Science at Mercury Insurance, he leads efforts to transform how the insurance industry quantifies, values, and adapts to natural catastrophe risk. His team integrates cutting-edge hazard research with focused risk modeling to ensure that investments in mitigation and smarter rebuilding translate into meaningful financial incentives for homeowners, businesses, and communities. Steve believes that insurance should be more than a mechanism for pricing risk—it should be a force for resilience. Mercury’s proactive approach in communities like Paradise, California, and Orchard Hills demonstrates that belief in action: rewarding risk reduction, supporting smarter design, and helping to break the cycle of destruction and loss. With over 30 years of experience at the intersection of climate science, finance, and technology, Bennett has built a career focused on connecting insight to action. Before joining Mercury, Before joining Mercury, Bennett collaborated with researchers at the Scripps Institution of Oceanography, engaging with projects that connected atmospheric science and decision-making for real-world impact. He later cofounded Demex, leading the development of data-driven parametric reinsurance products that protect against severe convective storms. Earlier in his career, he quantified the financial implications of extreme weather at Enron and Citadel and later led climate risk software initiatives supporting global supply chains for companies such as Unilever and AB InBev. Bennett also serves on the American Meteorological Society Council and chairs the Forum on Climate-Linked Economics, advancing dialogue between the scientific, financial, and policy communities. As part of the adjunct faculty at the University of North Carolina at Chapel Hill, he co-developed and teaches Introduction to Risk Management and Insurance, as well as The Launch Lab: Ideas to Impact. He mentors students exploring research on global challenges such as wildfires, tornadoes, and earthquakes. A contributor to Bloomberg Television, Bloomberg Radio, and CBSN, Bennett is recognized for his ability to translate complex science into actionable strategy—empowering the next generation of leaders to build a more resilient future.

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