California Wildfires Reveal Significant Market Impacts

Over the past decade, there have been multiple catastrophic losses due to wildfire with the intensity, frequency, and duration escalating due to factors, such as climate change, prolonged droughts, and urban expansion into fire-prone areas. Of the top 20 largest California wildfires, in terms of structures impacted, eight have occurred in the last five years and 15 have occurred in the last 10 years. The frequency and severity increases have had a profound impact on insurers, policyholders, and regulatory frameworks. Additionally, the financial impacts have resulted in many insurers withdrawing from markets and exponentially increasing premiums – all while leaving many policyholders struggling to find affordable coverage.

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