Europe's Wildfire Insurance Gap Worsens Amid Intensifying Heat

Europe's wildfire insurance gap is growing as heatwaves intensify across the continent. According to recent analysis by European regulators and the European Central Bank, only about one quarter of weather- and climate-related economic losses are insured.

The rest falls on households, companies, and public budgets. The gap is particularly stark for natural catastrophes such as floods, heatwaves, and wildfires, which are hitting southern Europe with growing frequency.

Wildfire seasons have lengthened and intensified around the Mediterranean, with more days of extreme fire weather and larger burned areas in countries including Spain, Portugal, Greece, and Italy. Recent seasons have seen evacuations of tourists from islands and coastal resorts, disrupted flights, and closures of campsites and holiday parks at the height of the summer peak.

The European Insurance and Occupational Pensions Authority highlights a persistent and widening 'protection gap' for natural catastrophes. Climate change is undermining traditional models of risk, and without intervention, more assets will become either uninsurable or insured only at much higher cost.