Wildfires have created instability within risk transfer markets. Here’s a path forward

Wildland-urban (WU) fires can devastate lives and communities, overwhelm emergency response efforts, and exhaust sheltering and recovery resources.Rapid fire spread into communities accounted for 78% of structure loss over 2001-2020, and rates of structure loss from such wildfires increased by 160% from 2010 to 2020 over the prior decade (1, 2).These fires carry enormous societal costs, including mortality, morbidity, loss of critical infrastructure and services, home destruction, and loss of insurance coverage (3, 4).The escalating frequency and damage of catastrophic WU fires are accelerating faster than social systems can adapt, presenting disruptive and systemic risks.Among the most pressing: the destabilization of the insurance industry.This crisis stems from a failure to accurately capture and model risk in the built environment, including fire spread into development and the structure-to-structure nature of WU fire loss.To effectively translate wildfire hazard into a quantifiable built environment risk, policymakers and researchers need a comprehensive and collaborative systems approach that prioritizes advanced risk modeling ( 5 ), mandates changes to the built environment through stricter codes, and coordinates efforts across all levels of government and industry.How did we get here?A long-standing desire to reduce perceived threats and increase the value of residential development in fire-prone landscapes perpetuated a cycle of fire exclusion.Aggressively suppressing fire in the western United States The frequency and damage from Wildlandurban fires like those around Los Angeles in January 2025-including in the Palisades area pictured here-are accelerating faster than social systems can adapt.