Tamping down wildfire threats: How insurers can mitigate risks and losses

Climate risk management is a critical human and business challenge – one that is increasingly visible in the current escalation of the twin perils of wildfire and flooding. In 2021, economic loss due to wildfires was $20 billion in the United States, less than half of those insured, marking the seventh year in a row such losses surpassed $2 billion.

Produced by Capgemini in collaboration with the Insurance Information Institute, this Tamping down wildfire threats report discusses how insurers are poised to aid at-risk communities through pre-emptive mitigation leveraging advanced data technologies and data, and by offering community-based catastrophe insurance programs and other solutions.

Key findings:
• Collaboration - As wildfires are an issue that connects many stakeholders a joint approach is necessary to tackle it. This means partnering with communities to create strategies that focus on proactive risk prevention.
• Advanced tools and technology - Deployment of sophisticated prediction tools and machine learning-based pricing and risk models can enable more accurate risk assessments.
• Insurers as first responders - Although insurers are already on the frontline in catastrophic weather events such as wildfires, more needs to be done to inform public policy to create partnerships that drive change.