Corelogic’s John Rogers On Ai, Climate Risk And Land Development Issues

John Rogers is a well-known name in the world of mortgage and real estate data analysis. The globe-trotting CoreLogic executive recently earned a larger role at the California-based company and is now serving as its chief data and analytics officer.

Rogers met with HousingWire to discuss his new role and cover a variety of topics, including artificial intelligence (AI), climate risk and land development. This interview has been edited for length and clarity.

Neil Pierson: What does your expanded role as chief data and analytics officer mean?

John Rogers: I’m very fortunate to be in the role. And I get to look after nearly 300 data scientists, data gurus, who nurture all the 22,000 data assets that come into the company, to make sure it’s the right quality. We have amazing data scientists who are building out new models — from reducing premiums on wildfire insurance in California to using image analytics so that an appraiser can capture the appraisal in real time and use it for quality assurance.

I look after the dataset and all things related to property location. The data gurus are ensuring the quality, finding new insights, and delivering it to our clients and our solution sets that face off into real estate, mortgage, insurance, government and so forth. I’m very fortunate — they’ve all got brains the size of planets.

NP: AI is such a vast and complex topic, but what do you see happening right now in that space? What are some of your AI initiatives at CoreLogic to sort out the data analysis piece and more quickly and efficiently serve your end user?

JR: We literally have, I think, just under 100 initiatives in some form right now at CoreLogic that are underpinned by AI. We can do that because we have the scale and we have the infrastructure in place. You can capture appraisals using your iPhone — images and video and talking to your phone — to fill out the appraisal form at a high quality. That is taking time, cost and energy out of the process and allowing the appraiser to appraise more homes or spend more time with his family.

We’re also working to reduce wildfire premiums in California. The insurance commissioner there declared 13 resiliency prerequisites. We use AI and image analytics to look at every single home and provide that insight to insurers, who then can reach out to you and say, “Hey, we can reduce your wildfire insurance by a certain percentage.” Obviously, insurance premiums have skyrocketed. We’re all feeling the pain over the last three to four years. In Florida, costs have risen 68% over the last three years. It’s a real hot potato.

There are so many things we’re doing. One that’s in the oven right now, in the attainable home area, addresses the housing shortage of about 1.6 million in the United States for families of low to moderate income. The total number varies between 4 and 5 million.

One of the challenges in this area is that it typically takes double-digit months to several years to get approval, the tick in the box, to build homes. We can now do that in an afternoon. We can literally identify land to build a certain type of home with a certain type of material at a certain cost, and we can try to solve the conundrum while providing an ROI back to the developer.

NP: You touched on climate change issues there, which leads into the next question. What is CoreLogic working on to address climate change, an issue that will only grow in importance in the coming years?

JR: We want to make sure we make homes more resilient and protect the largest asset class in the world at $45 trillion. Unfortunately, with temperatures rising, you see the frequency and intensity of major weather events on the up. Since 1980, there were roughly eight major weather events per year that each caused over $1 billion dollars in damage. Last year, there was 28.

What we provide the market is something called climate risk analytics, which allows companies to financially measure and mitigate the impact of climate through every single property up to the year 2050. Broadly, for every $1 invested in making a home more resilient, it’s equivalent to about $6 if that that disaster did occur and you need to rebuild the home.

NP: Let’s talk specifically about flooding related to climate change. The National Flood Insurance Program (NFIP) is working with outdated flood zone models. Are you doing any work in that area?

JR: That’s a very interesting area. Ninety-five percent of all flood insurance is from the NFIP, which is good for you and I as homeowners. But there are challenges between federal and state authorities, so sometimes flood maps at the state level are not updated, even though it has been requested.

Coupled with that, we supported FEMA in building out something called Risk Rating 2.0. Imagine we’re going from a first version of a Tesla to the latest Tesla car that we have today. Risk Rating 2.0 is basically getting down to the flood risk per house, which is fantastic.

The natural inclination is with insurance premiums is “Oh my goodness, everything’s going to go up.” But with the 2.0 restriction, when we looked at areas in Florida, 88% of current premiums would either go down, stay the same or go up by $10 a month. No one likes the bill going up, but hopefully that’s tolerable when you’re looking after your biggest asset.

NP: You work directly with land developers too. We’ve heard a lot of discussion about these issues during the election season. What sort of policies are you helping to develop on their end?

JR: There’s obviously a complex set of issues for housing development — where to build, NIMBYism, how do you finance it, how do you get an ROI? We need to really galvanize the industry to reduce that housing shortage.

There are a lot of amazing things happening in the U.S., from what some of the states are doing, to private investors, to the big building developers, to 3D-printed houses. I would argue there isn’t a connective tissue across all of this, and there isn’t enough of a movement to really push it.

We have a coalition we’re harnessing right now — banks, lenders, insurers, building developers, technology companies — with the goal to reduce that 1.6 million deficit of homes. We’ve just embarked on research of asking these 1.6 million people, “What do you want?” It might sound like a very basic question, but you could probably argue there hasn’t been much research done in that area.