Allianz Emerging Risk Trends Report 2025: Wildfires Emerge as a New Global Risk

Allianz Commercial's "Emerging Risk Trends 2025" report assesses forest fires—increasing in intensity and frequency—as a new emerging risk factor globally, emphasizing that companies must raise their awareness of this risk to protect their assets and operations. According to the report, the cost of forest fires increased sixfold over 10 years.

According to Allianz Commercial's "Emerging Risk Trends 2025" report, the frequency, intensity, and geographic distribution of forest fires have increased significantly in recent years due to climate change, human activities, and changing land use patterns. Their rapid spread creates major risks across various sectors and regions worldwide. The report, which cites the destructive Los Angeles forest fires in January 2025 as an example, identifies Western United States, Western Canada, Southern and Eastern Australia, and Southern Europe as the geographic regions most exposed to forest fires. However, such fires are now also occurring in previously low-risk areas, including forests in northern Canada, Scandinavia, and Russia.

Global insurance losses increased more than sixfold over 10 years
The climate crisis elevates risks by increasing fuel loads, drying fuels, intensifying winds, increasing lightning activity, and promoting invasive flammable species. The last 10-year period (2015-2024) ranks as the warmest 10 years since 1850, while 2024 set a record as the warmest year. The number of people and property affected by forest fires is also rising. Global insured losses from forest fires increased sixfold, rising from USD 8.7 billion in the 2000s to USD 56.3 billion in the 2010s. The report identifies the sectors facing the most significant risks in terms of damage and business interruption from forest fires as utilities, energy, real estate, construction, agriculture, and transportation. The report also notes an increase in new regulatory needs and litigation related to forest fire liability, emphasizing the need to develop effective risk management strategies and forest fire management plans.

These strategies include creating defensible spaces, managing vegetation, and using non-flammable building materials. Fire suppression and protection strategies are also evolving, and companies must adapt to them. It is recommended that companies develop and implement an effective forest fire preparedness and business continuity program, and regularly review and update it.

The report also notes that advanced technical tools and innovations are available for modeling and reducing fire risk. Examples include seasonal forecasts, drone surveys, geographic information system (GIS) mapping, thermal imaging, vegetation management systems, and artificial intelligence cameras.

Öktem Örkün: "The first step is to take precautions before risk occurs"
Öktem Örkün, Deputy General Manager of Elementary Commercial Insurance at Allianz Turkey, commenting on the report, pointed to the forest fires that have broken out in many regions of the country in recent days and whose suppression efforts continue, stating: "Forest fires, which have been our hottest topic recently, threaten our lives, many living species in nature, our trees, and our most precious material and spiritual assets. According to the announcements of the General Directorate of Forestry, 2,520 forest fires occurred in 2023, affecting 15,520 hectares of forest area, while in 2024 a total of 3,800 forest fires broke out in our country, affecting 27,000 hectares of forest area. This shows that in just one year, the number of fires and the damage they caused increased by approximately 50 percent. As stated in the report, while the intensity and frequency of fires increase every year, they appear as a rising risk factor not only in our country but globally," he said.

"Awareness must increase at both individual and institutional levels"
Emphasizing the importance of identifying risks and taking precautions before they occur as a risk-based sector, Örkün stated: "The most important step that can be taken regarding earthquakes and fires, which rank among the first three risks our country faces, is to take precautions before the risk materializes. The way to achieve this is by increasing awareness at both individual and institutional levels. With the support of the Allianz Group, we are conducting important work to increase this awareness at Allianz Teknik, Turkey's first and only accredited earthquake and fire testing and training center. Our center, which is the first laboratory to consolidate fire and earthquake tests in accordance with international standards in a single facility, also provides specialized fire risk training to companies. In addition to these trainings, as an accredited organization, we serve companies that want to document the fire response of the materials they use," he said.

In conclusion, forest fire risk requires a multifaceted approach by companies, including compliance with all laws and regulations related to fire safety. More broadly, preparing for forest fires requires efforts to reduce greenhouse gas emissions, adapt to changing environmental conditions, and implement effective forest fire management strategies. The report concludes that reducing forest fires is a complex and urgent issue that requires cooperation at local, national, and global levels to minimize risks and build resilience in the face of changing climate.