The Role of Insurance in Wildfire Risk Management

Wildfires are becoming more frequent and severe, yet South Africa’s approach to managing wildfire risk remains fragmented. In this Discussion, we sit down with Patrick Ryan, a wildfire practitioner and innovator at Vulcan Wildfire Management, to discuss the urgent need for better wildfire preparedness and risk management.

Patrick shares insights from years of experience, including the lessons learned from the devastating Knysna fires, and explains why communities, insurers, and property developers need to work together to reduce risk. With urban expansion pushing into fire-prone areas and climate change increasing the likelihood of extreme wildfire events, traditional firebreaks and emergency response systems may no longer be enough.

We delve into how insurers can play a pivotal role in driving behavioural change—offering incentives for fire-safe building materials, vegetation management, and risk assessments, much like how security measures impact insurance premiums. Patrick also explains how embers, not direct flames, are responsible for most wildfire-related home losses, and how small design changes could make a significant difference in saving properties.

This episode is essential listening for insurers, brokers, risk managers, and homeowners looking to understand the growing wildfire threat and what can be done to mitigate it before disaster strikes.

Key Points

• Wildfire Risk is Underestimated: Despite past disasters like the Knysna fires, risk management and preparedness remain inadequate.

• Insurance Can Drive Change: Incentive-based insurance models (similar to security-linked policies) could encourage homeowners to adopt fire-safe practices.

• Extreme Wildfire Events Are Unstoppable: Fires driven by strong winds and low humidity cannot be controlled—only mitigated through proactive risk management.

• Embers Cause 90% of Home Losses: Most homes are lost due to embers finding vulnerabilities, not direct flames, making fire-resistant materials and design crucial.

• Urban Expansion is Increasing Risk: More properties are being built in high-vegetation areas, often without adequate wildfire protection.

• Collaboration is Key: Insurers, brokers, town planners, and property developers must work together to promote fire-safe communities.

• Fire Breaks Are Misunderstood: They don’t stop fires but provide a defensible space for firefighting efforts.

• Climate Change is Making Fires Worse: More frequent and severe wildfires are expected as weather patterns shift.