This northern hemisphere summer, the wildfire headlines just keep on coming: “Wildfires sweep Spain, Portugal and Greece during unremitting heatwave”; “Wildfires in Canada are now burning where they never used to”; “2025 on track to beat UK record for wildfires”.

And a recent report from international brokerage Gallagher stresses that fire is no longer just a summer threat – the rules have changed.

“Every season is now wildfire season,” it says, and fires in urban areas are a “growing concern for communities, businesses and insurers alike”.

January’s devastating events in LA are still fresh in the memory. Blazes fuelled by strong Santa Ana winds, coupled with a period of low rainfall and extremely dry vegetation, claimed 30 lives, destroyed 16,251 structures and burnt more than 22,000 hectares.

“Seeing such significant fires during winter is certainly abnormal,” Gallagher Re chief science officer Steve Bowen says. “We’re facing a new reality regarding the seasonality of wildfires.”

In March, a series of fires in South Korea killed 32 people and destroyed 5000 properties, burning 104,000 hectares in just one week. 

Gallagher says the combination of a warming world and changing land use is causing more frequent and severe fire losses, sometimes in areas that have had little or no prior exposure.

The evolving threat has resulted in larger economic losses and higher insurance costs, it says.

Insured losses from the LA fires are anticipated to reach $US40 billion ($61.43 billion), and since 2015 the US has recorded more than $US111 billion ($170.46 billion) in direct economic damage from wildfires. Of the 19 US wildfire events with losses in the billions, 15 occurred in the past decade.

Gallagher says the secondary impacts of wildfires can also be significant.  

In February and March, heavy rain in southern California caused flash flooding, mudslides and debris flows, triggering evacuation orders.

Other secondary economic impacts include loss of tourism and hospitality business, and lengthy disruption for agricultural industries.

Power utilities face damage to infrastructure, plus potential liability for fires ignited by their equipment. 

As the utility groups seek to mitigate their exposure to litigation, they regularly carry out pre-emptive blackouts during periods of heightened wildfire activity.

For businesses and communities, such outages can cause costly disruptions to operations, regardless of whether there has been a physical loss.

The LA fires demonstrated another concerning trend, as fires increasingly cross from country to urban areas, affecting entire communities.

“We’re essentially racing against the hazard,” says Ian Giammanco, MD of standards and data analytics at the US Insurance Institute for Business & Home Safety.

“Some of the issues we’re facing have developed over multiple generations. When we built our communities, we overlooked the historical threat of urban fires.”

Gallagher says insurers’ appetite for wildfire risk is becoming constrained as they aim to control their exposure. Underwriters are looking for more detailed property risk information based on construction, occupancy, protection and exposure.

“For clients with assets in a wildfire zone, any data analytics we can include with our submissions to underwriters can make a big difference to renewals, because carriers are using more technology and data points to underwrite this risk,” says Martha Bane, MD of US property at Gallagher.

Increasingly, US insurers are turning to third-party risk-scoring tools to assess, price and manage wildfire exposures. They can adjust pricing and limits accordingly and, in some cases, decline cover where a risk score exceeds a certain threshold.

The Californian Department of Insurance announced plans last year to enable wildfire catastrophe models to be used in the pricing of risks.

“That wildfire score can really dictate the amount of coverage insureds get and at what cost,” Ms Bane says. “But when clients do have a significant wildfire score, we can work with our loss control teams to establish a checklist for how they can harden their assets.”

Recent events have taken place a long way from Australia, which suffered its own unprecedented fires during the Black Summer of 2019-20.  

But as Gallagher points out, fire is now the threat that never goes away, and insurers across the globe are responding accordingly.

See Gallagher’s article here.