Addressing wildfire risk
Wildfires have had a devastating impact globally, and the UN projects a global increase of 14% in extreme fires by 2030. Just in 2024, wildfires resulted in $6 billion in global economic losses and $3 billion in insured losses. For California, the 2025 Palisades and Eaton Fires alone reached approximately $38 billion in insured losses. As climate volatility heightens, wildfire risk is increasing, burning more often, more intensely, and for longer, with previously unexposed areas experiencing events like never before.
As wildfire exposure to forestry and properties becomes exacerbated, many clients are seeking additional sources of capacity as a supplement or alternative to existing coverage. Descartes’ parametric wildfire cover offers an alternative risk transfer solution for particularly exposed industry sectors. We provide forestry investments, timber firms, pulp & paper companies, hospitality, and high-value properties with bespoke, first-in-class parametric coverage against wildfire risk anywhere in the world.
Assess
We assess and evaluate the client's wildfire risk, leveraging our proprietary risk model.
Customize
Design a customized cover, fit to the client's unique needs, in which payout structures are indexed according to the burned area.
Monitor
Upon policy inception, we continuously monitor the insured's location for wildfires to determine whether a qualifying fire has occurred.
Payout
Insured client receive a payout within days of the concluded coverage time frame, accelerating financial recovery and reconstruction.
Our case studies are all over the world
Utilizing Machine Learning and real-time monitoring from satellite imagery & IoT, our state-of-the-art technology helps businesses bounce back faster against climate, cyber and other emerging risks.
Our parametric approach to wildfire risk
Descartes offers two parametric wildfire insurance solutions: Fire-in-a-Circle and Burnt Area. Using satellite imagery and AI, Descartes determines burnt areas and wildfire proximity (within and around a predefined perimeter) to assess losses quickly and objectively.
Fire-in-a-Circle:
- Ideal for clients in the hospitality, asset management, renewable energy, homeowners associations, viticulture, and other industries
- Payouts are based on a wildfire occurring within a predefined geographic circle
- Direct physical damage is not required to trigger coverage, but a declaration of loss statement is needed
Burnt Area:
- Ideal for clients in the forestry, timber investment, carbon credit, viticulture, and other industries
- Payouts are based on the number of hectares burned—without exclusions based on the size of the fire
- Fully scalable across any area, meaning no on-site visit is required
By integrating weather patterns, vegetation types, topography, and human activity, we use AI not only to model and underwrite wildfire risks, but also to improve payout accuracy. Learn more here.
Who Should Consider This?
Our parametric wildfire products offer customized solutions for companies and organizations in industries such as hospitality, renewable energy, asset management, forestry, timber investment, carbon credits, and viticulture, as well as for homeowners associations.
Capacity
Up to $70 million per contract
Benefits Powered by Parametric Wildfire Insurance
Our parametric wildfire covers exemplify the effectiveness of parametric insurance solutions.
- Prompt Compensation: A swift, transparent process that clients can rely on, excluding the need for a lengthy indemnity claims process.
- Data-Driven Approach: The observation of historical losses and risk modeling allows us to accurately address clients’ needs.
- Bespoke Policies: Coverage tailored to the client’s needs and budget.
Empowering Businesses and Brokers with Advanced Wildfire Insurance Solutions
Descartes works hand-in-hand with insurance brokers and their clients to redefine wildfire risk protection through parametric insurance. Our exclusive products, competitive commission structures, and dedicated support make it easy for brokers to offer their clients straight-forward and bespoke parametric coverage, covering one of the worst rising climate risks.
Our parametric wildfire cover can be placed alongside existing property programs, enhancing the recovery and reconstruction from such extreme events with fast, transparent payouts.
Our expertise includes:
- Bridging & filling gaps not covered by conventional wildfire insurance
- Assisting clients facing challenging exposures or limited insurance options
Partnering with Descartes enables you to:
- Find the insurance capacity needed for your clients in a difficult market environment seeing the exit of many insurers
- Elevate your proposals and stand out in competitive RFP processes
- Access new markets and engage with new highly valuable clients exposed to wildfire risks
- Free yourself from complex wordings and exclusions, presenting your clients with a straight-forward transparent parametric policy on a few pages
- Collaborate on tailored solutions to expand and strengthen your portfolio with long-term carrier & client relationships
FAQ
What is driving the increase in global wildfires?
Climate change, hydroclimatic volatility (extreme shifts between wet and dry periods), and human activity are all making wildfires more frequent and destructive.
Which areas are most at risk for wildfires in 2025 and beyond?
Regions like California, Australia, parts of the UK, and South America (especially Brazil and Mexico) are seeing more severe and unpredictable wildfire seasons due to climate and weather shifts.
When is wildfire season and why is it changing?
Traditionally seasonal (summer/early autumn), wildfire risk is now increasingly year-round in many regions, driven by warmer temperatures, early snow melts, and drought.
Why is it getting more difficult to get wildfire coverage now?
Rising losses have led insurers to reduce capacity, introduce wildfire exclusions, raise deductibles, or refuse wildfire risks altogether — leaving many businesses exposed.
What gaps does traditional wildfire insurance leave?
Slow claims processes, exclusions for indirect losses (like lost income), and limited coverage for non-physical impacts make traditional insurance insufficient for many organizations.
What is parametric wildfire insurance?
A type of coverage that pays out automatically when a pre-defined trigger (such as a satellite-detected burnt area) is met — no lengthy loss adjustment needed.
Is parametric insurance reliable in real wildfire scenarios? Yes — it uses transparent, third-party data (e.g. satellites, weather records) and has been successfully applied in real-world cases like carbon credit protection and wildfire coverage for property owners.
How has parametric wildfire insurance worked for others?
Examples include a condo association in California who secured coverage after being dropped by traditional insurers (read the case study), and a timber company in Australia protecting the financial value of its carbon credits (read the case study).
Can parametric insurance cover lost income or regulatory needs?
Yes — beyond physical loss, it can cover lost revenue, operational costs, and compliance with lender requirements.
How is the coverage area defined for the Fire-in-a-Circle product?
The coverage area is determined by taking the insured location(s) and adding a buffer of a predefined shape, typically 100 meters, around the insured location(s). The exact geometry of the buffer area would be determined by underwriting during the quoting process, in collaboration with the broker and client.
How is the coverage area defined for the Burnt Area product?
The defined coverage area is based on shapefiles shared by the client. The coverage can account for one or hundreds of forests.
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