Beyond the burn: Understanding Europe’s changing property risk

For European insurers, the significance of wildfire may lie less in the losses on today’s books than in what the peril tells us about tomorrow’s property risk. As the industry gathers in Monte Carlo, capacity and insurability will again enter the conversation and wildfire provides a useful lens through which to consider both.

Whilst wildfire has historically been a relatively small contributor to insured catastrophe losses in Europe, this picture is evolving. Granted, Europe isn't another California in the making, but the underlying conditions deserve attention. Swiss Re Institute notes that record-breaking heat and dry conditions in 2026 appear to have contributed to an earlier start to the wildfire season in parts of Europe. Swiss Re has also highlighted continued development in the wildland-urban interface as an important source of growing exposure.

For insurers, the question is how to manage your business in these changing conditions and that question is becoming harder to answer from loss history alone. Resilience is not achieved by avoiding risk. It comes from understanding it, preparing for it and finding practical ways to reduce its impact.

Insured losses emerge from the interaction of a number of factors, including hazard, volume and value of property in exposed areas, and the vulnerability of individual assets. Greater risk at a local level does not mean every property within that region represents the same risk. Consider an underwriter looking at a commercial property on the edge of a wildfire-prone area. Knowing the regional wildfire hazard is an important starting point, but it does not answer the questions required to make an informed risk selection or price that risk. More questions need to be asked (and answered).

• Where exactly is the property?
• How close is it to vegetation?
• What is the surrounding hazard?
• How many properties am I already insuring in this area that are at risk of wildfire?
• What characteristics of the property could affect its vulnerability?
• And what would adding that risk mean for the insurer’s existing exposure nearby?

This is where granularity drives good decisions. CatNet®, our natural hazard analytics platform, provides high-resolution wildfire data across Europe. Its wildfire layer considers historical wildfire occurrence and frequency alongside climate change and location-specific factors such as topography, helping insurers assess potential wildfire exposure at individual locations and across portfolios. CatNet® also supplies specialized, AI-driven wildfire insights in high-risk geographies like the United States, Canada, and Australia.

For underwriters, this enables a more nuanced assessment at the point of quote. Rather than simply asking whether a property is in a wildfire-prone area, CatNet® helps them understand the level of hazard at the location and decide if they want to accept or decline the risk. Now consider the same issue from the perspective of a portfolio manager. One property may fit comfortably within the risk appetite. So might the next hundred. But when viewed together, those individually acceptable decisions can create concentrations that are difficult to see risk by risk.

Accumulation management is a key component of managing catastrophe tail risk. Swiss Re Risk Data Solutions has developed advanced wildfire-risk capabilities for high-exposure regions such as California that can also be leveraged by European insurers. We work with insurers to develop and embed real-time accumulation controls that identify and prevent excessive wildfire concentrations at the point of quote, allowing underwriting decisions to reflect the insurer’s existing portfolio exposure. This methodology helped one client keep portfolio PML nearly flat despite strong premium growth.  

We also help insurers see accumulations at a portfolio level. By enriching portfolio data with natural catastrophe risk information, insurers can identify potential accumulation scenarios, examine vulnerabilities and assess the impact of prospective business on their existing portfolio. Swiss Re's accumulation management helps insurers limit tail-risk while seeking the best growth opportunities in an automated, efficient manner.

That distinction is becoming increasingly important for property insurance: moving from awareness of hazard to differentiation of risk.

That has direct implications for insurability. When it becomes harder to distinguish the risk between different properties, the choices can become blunt: increase the price, reduce limits or step away from the risk altogether. Sometimes those responses will be necessary, but greater risk does not automatically mean uninsurable risk.

The more accurately insurers can differentiate one property from another, the more choices they have. Granularity can reveal where apparently similar risks are materially different. It can show where capacity can still be deployed with confidence, where concentrations need to be managed and where mitigation could change the underlying risk.

Better information therefore has value not simply because it allows insurers to measure risk more precisely. It can make risk more actionable. Applied Risk Intelligence means connecting data, models and risk expertise to real underwriting and portfolio management decisions. It is not only about understanding risk, but also about using that insight to support risk selection, accumulation management and portfolio-level decision-making.  

For the underwriter, that means deciding whether and how to write an individual property. For the portfolio manager, it means seeing where exposure is accumulating and steering the book accordingly. For the risk engineer, it means identifying where mitigation could change the risk.

And the value does not end when the policy is written. Imagine the morning after a major natural catastrophe. For a claims head, the immediate problem is very different. Thousands of policies may sit within the affected region, access may be limited, and adjusting resources are finite. The question quickly becomes, "where do we need to act first?"

Swiss Re’s Rapid Damage Assessment (RDA) is designed to support claims teams in catastrophe response. RDA combines near-real time tracking of catastrophe events with proprietary natural catastrophe models for portfolio-level event loss predictions and claims count projections. It also generates damage assessment for individual risk locations rapidly post-event by leveraging artificial intelligence at scale on aerial imagery.

This winter, we plan to make Rapid Damage Assessment available to insurers in Europe, helping claims managers and loss adjusters triage losses faster and prioritise response where it is needed most. The same underlying principle underpins the life of a policy: risk intelligence becomes most valuable when it influences better decisions. That speaks directly to Swiss Re’s mission of making the world more resilient.  

Whilst wildfire has historically been a relatively small contributor to insured catastrophe losses in Europe, this picture is evolving.