Pilot 5
Wildfire insurance enhancing adaptive actions
Pilot lead: AXA Climate
Due to the changing climate, wildfires are increasing both in Europe and worldwide. Portugal is one of the most fire prone regions in Europe which can result in significant damages and casualties. For example, in 2017 an extraordinarily intense fire season hit Portugal with a recorded total burned area of about 500,000 hectares and more than 120 human casualties . Climate conditions, ignition trigger, and vegetation cover are the key drivers of wildfire intensity and propagation.
Recent increases in wildfires and subsequent harmful
consequences pushed the public authorities to react, in
particular with the creation of Agency for Integrated
Rural Fire Management (AGIF) whose mission is to deploy
a fire management system and reduce the impacts of
wildfire in Portugal. To reduce vulnerability to fires,
it is crucial to address how insurance mechanisms can
promote adaptation measures at different levels, and to
engage with public entities in charge of deploying the
National Adaptation Plans. Thus, the purpose of this
pilot is to develop innovative wildfire forest
insurances to incentivise adaptation measures at
household and forest association levels.
The pilot begins in the central region of Portugal by
identifying adaptation measures that have the potential
to be combined with insurance modelling. Adaptation
measures could include the construction of fire breaks
and the reduction in the amount of forest biomass
available to burn in the most exposed regions, which
would subsequently decrease the frequency and intensity
of fires, reducing the overall risk and impact of
wildfires. AXA Climate will partner with AGIF to study
adaptation measures and wildfire insurance models. The
current wildfire models used will be analysed, and their
adaptation scenarios studied, with a focus on the
impacts at the forest management level and individual
household level. During the next innovation rounds, we
will co-design innovative insurance concepts to support
wildfire prevention and management in Portugal. Finally,
the replicability and transferability of the results
will be studied in other European regions.