Most of that loss was caused by the wildfires that affected parts of the Los Angeles County in January, causing the largest global insured loss from a wildfire. Unfortunately, wildfire activity in 2025 has been above average in many parts of the world. For Europe (especially Spain, Portugal, Greece and France), this year has been the worst wildfire season since records began in 2006 as more than one million hectares have burned.
Key Highlights
Natural catastrophe weather-related events have become more frequent and intense, leading to ever-higher insured losses, even when adjusted for inflation.
However, we observe recent softening in commercial property insurance premiums that is primarily driven by abundant reinsurance capital and market competition.
Although reinsurance capacity and pricing eased through mid-2025 at an aggregate level, loss-affected or wildfire-exposed regions will likely face tighter terms and higher retentions amid reinsurers' underwriting discipline.
"Wildfire risk has been on the rise over the last decade, much of it attributed to rising temperatures and drier conditions at a time when suburban sprawl is leading to more housing units situated within wildfire-prone regions," said Nadja Dreff, Senior Vice President and Sector Lead, Global Insurance & Pension Ratings. "Although near-term reinsurance capacity remains ample and reinsurance pricing softened recently, large wildfire losses in 2025 will likely lead to tightened terms for loss-affected programs."
DBRS Morningstar Commercial Property Commentary
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