White Paper

Why Insureds Need Comprehensive Wildfire Protection

With expanding wildfire risk, insurance isn't enough. Insureds also need to invest in risk mitigation to help protect their properties.
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White Paper Summary

Last year, California got away with a relatively mild wildfire season. By October, only 312,739 acres had burned. However, in June of this year, a wind-driven wildfire burned tens of thousands of acres of land and forced evacuations near the city of Tracy, California. Over the previous half-decade, an average of 1.57 million acres had burned by that point each year, the New York Times reported.

California’s wildfire season may have been tamer in 2023, but other states saw increased risk.

“The insurance crisis that we are experiencing in California is starting to spread into other states with similar risk, where it may not have been top of mind previously,” said Rachael Dougherty, senior underwriter and West Coast territory lead, E&S property, Munich Re Specialty.

“That’s by nature driving a lot more business into the E&S market—not just in California but in areas like New Mexico, Colorado, the Pacific Northwest, Texas and Hawaii.”

The financial strain of expanding wildfire exposures is causing a number of carriers to cease offering coverage in states where the risk is heightened. Others are tightening their terms and conditions and raising rates to account for increased losses from the peril. This is leading a number of insureds to increase their investments in risk management—and to turn to E&S markets in search of coverage.

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Munich Re, and its family of companies, has been a leader in risk for more than 100 years. We are spearheading innovation to deliver competitive advantages for our clients every day and disrupting on our own terms to reimagine the world of risk itself. Munich Re Specialty is a description for the insurance business operations of affiliated companies in the Munich Re Group that share a common directive to offer and deliver specialty property and casualty insurance products and services.