How Wildfires Are Transforming America’s Landscape
As I write this, fires burn in the north-eastern United States. More than 500 wildfires have broken out in New Jersey alone this autumn, and in recent weeks there have been fires in Connecticut and Pennsylvania, too. A 5,000-acre fire has been burning for over a week on the New York border. And that’s just one region, in one country. I could mention Portugal or Australia, California or Greece.
This isn’t normal. Wildfires are getting worse.
Why? Because of climate change. Thanks to global warming, natural disasters of all kinds, including wildfires, are getting larger, more frequent and more destructive, even in places that used to be safe. Extreme weather events are around four times more likely now than they were 150 years ago, and the historic wildfire season has expanded, stretching public resources and forcing communities to adapt – or try to. It’s a state of affairs that leaves people feeling deeply unsafe. This past weekend, hundreds of people evacuated their homes on the New York-New Jersey border.
The humanitarian cost of wildfires is huge. But fires also devastate ecosystems, unleash enormous volumes of carbon dioxide and methane, and cost a fortune. In the U.S. alone, wildfires account for over $89 billion in lost output. It’s a figure that’s projected to rise. No wonder, then, that even major insurers – Tokio Marine America Insurance Co. and Trans Pacific Insurance Co., for example, are leaving the areas most at risk of wildfires. State Farm, Farmers and Allstate have limited their exposure by cutting back on the number of new policies they issue or by tightening underwriting standards.
But there is an alternative. And that alternative is to make use of the technology now at our disposal. First among these is Earth Observation (E.O.), which uses A.I. to process the terabytes of image data captured by public and private satellites and turn it into intelligible, actionable insights. E.O. is invaluable for dealing with wildfires because it highlights the scale of the problem. But it also suggests and enables practical solutions. This is because historically, communities have had to depend on outdated risk models that don’t consider the impact that climate change has had on the world’s systems. E.O., which captures and provides timely data, allows for the creation of dynamic risk models which predict wildfires on an ongoing basis and with a striking degree of accuracy and detail. Using these, insurers can develop the kinds of risk management systems and approaches that simplify the job of underwriters while empowering the insured to track wildfire threats and take action. Thanks to EO, the value proposition of insurance is evolving. Insurers are not only providing compensation in the event of loss, but prediction, prevention, support and guidance to their customers.
Smart Firefighting: E.O. Models Provide a New Edge in Wildfire Alerts
It’s worth detailing quite how sophisticated these new, E.O.-enabled risk models can be. The very best weigh literally dozens of factors, from vegetation dryness and density to the gradient of the land, to the moisture levels in the air, to proximity to infrastructure. By combining all of these risk factors, the model can assess with staggering precision how likely it is that a wildfire will break out. A system that uses such a model can then notify those at risk, empowering them to clear away dry brush or create a defensible zone or, in the worst-case scenarios, to evacuate. Needless to say, emergency services professionals can also receive these same alerts, so that they can act at the earliest possible opportunity to protect lives and assets.
That deals with the first phase of a wildfire. The same technology can track the wildfire as it unfolds. This is enormously helpful. By doing so, we can identify an area’s weaknesses (and take action to strengthen them after the fire), track the extent of the fire damage (which informs future risk models), and understand how the fire came to end (which increases our awareness of fire mitigation and containment). Our response to every future wildfire will be more efficient, more intelligently funded, and better informed. Fire services and training will get increasingly advanced. Recovery and rebuilding, including claims processes, will be increasingly streamlined. In a phrase, E.O. optimises wildfire management.
Facing the Flames: How Insurers Must Adapt to the Climate Crisis
But we have to embrace it. Many insurers, seeing the devastation caused by wildfires and other natural disasters, are understandably turning away, believing there’s little they can do. It raises the question about the industry’s ability to effectively address modern challenges and an increasingly complex risk environment. And certainly, we mustn’t pretend that any kind of silver-bullet solution exists, or promise more than we can deliver. But we can do more. And in the end, we’ll have to do more. Insurers can ignore the climate crisis, or try to avoid it, but on current predictions, it won’t ignore them. That’s true of everyone. If insurers make use of the technology that our best and brightest have created, they can begin to grapple with wildfires. In doing so, they can help to increase societal resilience and bring peace to mind to individuals and whole communities – as insurers have long been able to do.
By Antoine Rostand, President and Co-founder of Kayrros