Domestic insurers are expected to absorb most of the losses from Europe’s worst wildfire season in recent history, but the blazes are also raising a bigger question: who will pay as climate-driven disasters become more frequent and destructive?
Authorities have evacuated about 220,000 people in France as unprecedented wildfires burn across the country. Fires have also swept through Spain and Greece, fuelling concerns about rising insurance costs and widening gaps in protection against climate-related risks. France’s total losses could reach €10 billion to €15 billion ($11.5 billion to $17.3 billion), with insured losses running into several billion euros, according to credit ratings agency Morningstar DBRS.
While manageable for the industry, analysts say the fires could offer a glimpse of the challenges ahead if blazes increasingly threaten densely populated areas.
“This might be a real threat to the industry if you have a wildfire out of control, reaching a medium-sized city like Bordeaux,” said Marcos Alvarez, managing director at Morningstar DBRS. “That is a completely different scale of losses.” While far below the roughly $40 billion in insured losses generated by California’s Palisades Fire in 2025, the French fires could still become the country’s costliest wildfire event on record.
