Briefing: Insurers set to feel the heat as climate fires new risks for UK

As the UK emerges from its fourth heatwave of the summer so far, the impact of climate change in insurance continues to land the industry in hot water.

Although subsidence is usually deemed by industry professionals as the UK biggest summertime claims threat, fire chiefs and actuaries this year have a different threat front of mind.

According to membership organisation the National Fire Chiefs Council (NFCC), the UK is in the midst of a battle against an unprecedented surge in wildfires.

In England and Wales alone, fire crews have already tackled 856 wildfires this year – this compares to 1,037 NFCC confirmed wildfires that took place across the entirety of 2020/21.

Although official definitions of wildfires vary, the NFCC’s website describes a wildfire as any uncontrolled vegetation fire where a decision or action is needed about suppression.

Typical traits of a wildfire – according to the NFCC – include a sustained flame length of more than 1.5 metres, covering a geographical area of at least one hectare, presenting a serious threat to life, environment, property and infrastructure, as well as requiring mitigating resources for at least six hours.

According to the UK government’s National Resilience programme, the sharp rise in wildfire incidents across England and Wales so far this year puts 2025 on course to exceed the record breaking totals seen in 2022.

By the end of July 2022, there had been 596 wildfires. By the same point this year, the UK’s wildfire total had soared to 793 – a 33% increase. The contrast with last year is even starker – between 1 January and 31 July 2024, there were 104 wildfires. This year’s total over the same period is 663% higher.

NFCC chair Phil Garrigan said: “Firefighters are already being pushed to their limits, with the major incident declared in Dorset and Wiltshire this week and the blaze at Arthur’s Seat showing just how demanding and dangerous these events can be.

“Each wildfire can take days – sometimes weeks – to bring under control, tying up crews and specialist equipment and placing huge strain on other vital fire and rescue work. There’s a real human toll on our firefighters too, who are undertaking the most arduous work in the toughest conditions.

“We are already seeing more wildfires at this point in the year than in 2022 — which itself was a record year — and that is deeply concerning.

“This is against a backdrop of sustained cuts in funding and reducing firefighter numbers – with 11,000 fewer firefighters in England now than there were 10 years ago, alongside a 20% increase in demand over the same period.

“Climate change is fuelling more frequent and intense extreme weather events – wildfires are no longer a seasonal threat. They are a persistent and growing risk to life, property and the environment.”

Changing risk scenario

For insurers, the issue of wildfires is a complex one in terms of claims.

Quite apart from the physical loss these fires can devastate, there are also associated risks – such as land and air pollution, or business interruption due to denial of access or loss of attraction.

Subsequently, there is a rising demand for more coverage to insure both homes and businesses that now find themselves on the front line of a threat which was never really apparent five or 10 years ago.

Wildfires present a risk the industry will need to model and address as the pressure continues to mount.