Wildfires and bushfires are increasing in their threat and are difficult to quantify due to the interplay of human-made and natural factors. The hazard zones of these fires can be determined, but they can also occur unexpectedly and cause heavy losses. They primarily occur after prolonged dry spells and high air temperatures when dry vegetation becomes easily ignited and can quickly spread if wind is strong. Climate zones with enough rainfall to allow vegetation to flourish but also experience long periods of warm weather and little precipitation, such as southeast Australia and California, are particularly high-risk areas. The majority of fires near populated areas are caused by human activity, and intentional fires are also a significant factor. The loss potential of wildfires is growing, especially in regions like the west United States and southeast Australia where urban sprawl is contributing to the changing risk. Climate change and natural climate oscillations are increasing the likelihood of hot and dry conditions that fuel wildfires. Europe has also experienced an increase in wildfires due to heatwaves and droughts, although they tend to be less destructive than those in the USA. Modelling the wildfire risk is complex due to the various factors involved. Munich Re is continuously developing models to estimate potential insured losses and support research into loss prevention measures.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| Climate change increasing wildfire risk | Increasing risk of wildfires due to climate change | More frequent and severe wildfires, greater loss potential | Climate change and human activity |
| Loss potential of wildfires growing | Increasing potential for losses from wildfires | More destruction in affected regions, greater need for risk assessment and prevention measures | Urban sprawl and climate change |
| Wildfires with hot and dry conditions four times more likely than pre-industrial times | Greater likelihood of intense wildfires with hot and dry conditions | More frequent and severe wildfires, increased risk in affected regions | Climate change and natural climate oscillations |
| European wildfires increasing due to heatwaves and droughts | Increasing wildfires in Europe due to heatwaves and droughts | More frequent wildfires, larger burnt areas | Climate change |
| Complexity of modelling wildfire risk | Difficulty in accurately modelling the risk of wildfires | Improved risk assessment models and prevention measures | Continuous research and collaboration |