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Insurance Europe's Thea Utoft Høj Jensen Talks Wildfire Risks
Brief
Insurance Europe director Thea Utoft Høj Jensen told Bloomberg that while climate change is producing more frequent and severe wildfires — with a record number of burnt areas this season — the European insurance industry currently has sufficient capacity and standard products to cover those losses. Jensen agreed with recent comments from major CEOs (AXA, Swiss Re, Zurich) that risks are growing, but she drew a distinction between capacity and demand: many affected zones remain uninsured, so insured-loss tallies will understate broader economic and societal impacts. She urged long-term, joint action by insurers, municipalities and governments on prevention and adaptation (better forest planning, fire breaks, early warning and climate-informed urban planning) to limit premium pressure. Jensen also said catastrophe bonds have a role but are unlikely to proliferate in Europe now, since private capacity is not yet constrained; policymakers should instead focus on preparedness and using existing market capacity effectively.
Why it matters
Thea Utoft Høj Jensen (Director General, Insurance Europe) said Europe is seeing a record number of burnt areas this season but the insurance sector currently has "ample capacity" and standard policies still provide wildfire cover, so the industry can manage the present level of wildfire losses.
Key details
- Jensen warned many areas hit by wildfires are uninsured, meaning insured-loss figures will understate total economic and societal losses and making underinsurance a key concern for recovery and planning.
- She argued rising climate-driven risks will put upward pressure on premiums as prices must reflect risk, but emphasized prevention and adaptation (forest management, fire breaks, early warning systems, integrating climate data into urban planning) are critical to keeping insurance affordable.
- On financing, Jensen said catastrophe bonds are a useful tool but unlikely to see major uptake in Europe now because existing private reinsurance capacity is sufficient; she does not see a need for a European public backstop at present.