Insurer`s damage from large wildfires in Europe has a 75% jumped

Damage from large wildfires in Europe has jumped dramatically, with a 75% increase in the amount of land burnt in the last year.

The countries which saw the largest increases in amount of land burnt in the past year include Bosnia & Herzegovina (246%); Croatia (130%); Italy (36%) and Greece (34%).

According to Chaucer Report, in June and July parts of Europe have experienced devastating wildfires as a result of rising temperatures.

Whilst much attention has been paid to the impact of climate change on wildfires in North America, European wildfires have also been increasing in frequency and severity as a result of climate change and urbanisation.

Higher temperatures have increased the risk of fires starting on the continent, whilst drought-like conditions from dry soil are also making it easier for wildfires to spread rapidly.

The fact that forest management practices have not kept up with evolving trends has made efforts to suppress wildfires considerably less effective, leading to more damage being caused.

Modelling capabilities of wildfire risk in Southern Europe are less advanced than that of the US and Canada. As a result, reinsurance companies are having to rely on internal methods for assessing risk rather than probabilistic hazard models.

In 2020, 787K hectares of land were burnt across 35 European countries, up from 450K hectares in 2019.

The significant increase in land destroyed by wildfires is creating a challenge for the industry.

Climate change and shifting demographic patterns are making wildfires more dangerous. Until modelling becomes more sophisticated, and the risk is better understood, wildfire risk in Europe will be difficult to adequately price.

Wildfires have only become a major priority as a peril relatively recently. However, given the increase in frequency and severity, losses are beginning to mount. Some reinsurers begin to limit their exposure as a result.

by Nataly Kramer