Overview
- The region is enduring one of its worst wildfire seasons on record, with fires in France, Spain and Greece forcing roughly 220,000 people to evacuate in France, credit and news reports say.
- Credit ratings agency Morningstar DBRS estimates on Tuesday that France's total losses may reach €10–15 billion, with insured losses running into several billion euros.
- Private insurers are expected to absorb most immediate recovery costs because wildfires are not covered by France's state natural disaster compensation scheme.
- Insurers have adopted emergency measures to help evacuees, including paying for hotel stays of up to three weeks for policyholders, while standard travel policies generally do not cover cancellations for 'change of mind'.
- Analysts warn a large protection gap and limited historical wildfire data are complicating underwriting and pricing, which is likely to raise household premiums in higher-risk areas and prompt calls for broader market and policy changes.