The frequency, severity and geographic occurrence of wildfires have increased significantly in recent years, fueled by climate change, human activities and evolving land use patterns. Their rapid spread poses substantial risks across various sectors and regions around the globe, according to the new Emerging Risk Trend Talk report from Allianz Commercial.

As the devastating Los Angeles wildfires in January 2025 showed, the western US, along with western Canada, southern and eastern Australia, and southern Europe are the geographical zones most exposed to wildfires. However, such fires are also now occurring in locations not previously regarded as a significant risk, including forests in northern regions of Canada, Scandinavia, and Russia. South Korea suffered the deadliest wildfire outbreak in its history during March and April 2025.

Wildfire seasons are starting earlier and lasting longer, which impacts on the ability to share firefighting resources within regions. Catastrophic wildfires are becoming larger and more frequent. The impacts of the worst wildfires in the last decade in terms of property damage and fatalities have been significantly greater than for at least 50 to 100 years in some regions.

Climate change is elevating risks by increasing fuel loads, drying fuels, strengthening winds, boosting lightning activity, and promoting invasive flammable species. The 10 warmest years since 1850 have all occurred in the past decade (2015-2024), with 2024 being the hottest on record.

As well as climate change, wildfire exposures are being intensified by changing land use, in particular in the 'wildland urban interface', or WUI – locations where human development is

expanding into areas of wildland vegetation prone to fires. The amount of people and property exposed to wildfires is increasing. This exposure coincides with increased lengths of electricity lines and roadways – both key ignition sources. Global insured losses from wildfires increased from US$8.7bn in the 2000s to $56.3bn in the 2010s[1], becoming more than six times more expensive. Any sector can be impacted by a wildfire but utilities and energy, real estate and construction, and agriculture and transportation are among the sectors which face the most significant exposures to damage and business interruption. Regulatory challenges and litigation related to wildfire liabilities are also on the rise, necessitating the need for robust risk management strategies, the report notes.

Strategies include creating defensible spaces, managing vegetation and using non-combustible building materials. Fire suppression and protection strategies are also evolving, and companies need to keep up with them. Developing and implementing an effective wildfire preparedness and business continuity program, and regularly reviewing and updating it, is recommended.

There are also a range of increasingly sophisticated technical tools and innovations that can be used to model and mitigate fire risk, the report notes. Examples include seasonal forecasting, drone surveys, geographical information system (GIS) mapping, thermal imaging, vegetation management systems and artificial intelligence cameras.

"Businesses should identify the risk for their operations to trigger wildfires or be impacted by wildfires started by human or natural causes, assess the potential impacts and develop well-documented wildfire management plans appropriate to their operations," says Michael Bruch, Global Head of Risk Advisory Services at Allianz Commercial.

Ultimately, wildfire mitigation calls for a multi-faceted approach, including individual companies' compliance with all relevant laws and regulations concerning fire safety. More broadly, preparing for wildfire will require efforts to mitigate greenhouse gas emissions, adapting to changing environmental conditions, and implementing effective wildfire management strategies. This might involve a combination of government policies to reduce carbon emissions, land use planning to minimize exposure to wildfire risk, and investments in those technologies that enhance fire detection, prediction, and suppression.

Mitigating wildfires is a complex and pressing issue that requires coordinated action at local, national, and global levels to minimize risks and build resilience in the face of a changing climate, the report concludes.

Download the report ARC-Emerging-Risk-Trend-Wildfires.pdf

Allianz Commercial has launched its new Climate Adaptation and Resilience Services (CAReS) tool in order to help companies better assess and manage the climate risks facing their business.

The web platform includes a fire weather Index, which will help companies to prioritize their wildfire resilience investments.

Allianz Commercial's wildfire consulting services enable companies to obtain specific risk assessments tailored to their needs. These can include projected future exposures, expert vulnerability assessments, risk profiling, and mitigation strategies.

Allianz Commercial's Emerging Risk Trend Talk series highlights critical risk topics for companies together with recommended risk mitigation and loss prevention measures. Topics previously covered include lithium-ion batteries, mass timber and solar panels.