Europe’s wildfire ‘protection gap’ is growing, insurers warn
Insurers warn that Europe is facing a "protection gap" in wildfire cover as disaster recovery costs outpace insurance coverage.
Europe is facing a growing "protection gap" in the wake of increasing wildfires, heatwaves, and extreme weather events, according to insurers. The region has seen a surge in disaster recovery costs, which are outpacing insurance coverage, leaving a substantial share of financial damage uninsured. Insurers warn that without systemic intervention, countries and local jurisdictions may not be adequately prepared to deal with the risks of wildfires and weather disasters.
The financial impact of these events is significant, with insurance companies paying out $56.3 billion in losses for wildfires in the 2010s, six times more than the $8.7 billion paid in the 2000s. The sectors hardest hit include utility and energy, real estate, construction, agriculture, and transportation. The devastating Los Angeles wildfires in January last year highlighted the destruction of assets of some of America's wealthiest residents, costing insurance firms Munich Re and Hannover Re a combined $1.9 billion in the first quarter of 2025.
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