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The 2025 Los Angeles wildfires underscored the need to rethink how the industry approaches wildfire risk. From advanced modeling to technology-driven insights and stronger collaboration, insurers are finding new ways to build resilience and support communities for the long term.
Published on October 21, 2025
The January wildfires in Los Angeles put 2025 on track to be one of the most devastating cat loss years in over a decade. In addition to the human tragedy, more than 16,000 buildings were lost1. Damage estimates ran as high as $131 billion, and insurance carriers braced to absorb up to $45 billion in losses2.
Beyond these grim realities, the wildfires—especially the Palisades and Eaton fires—also accelerated a shift in how the insurance industry approaches risk. Wildfires are now more frequent, intense and unpredictable than ever, and they demand fresh strategies for effective risk management. The insurance industry must adopt new approaches to risk aggregation, technological innovation, and community-level collaboration.
Rethinking aggregation
The first big lesson from the fires: our old models aren’t cutting it, especially in dense urban areas like Pacific Palisades. With the growth of the Wildlife-Urban Interface (WUI), risk aggregation is more complicated. Buildings might house several insureds, or share common infrastructure, or have third-party owners. Understanding these connections is crucial.
To tackle this, carriers are turning to advanced stochastic models—tools that embrace uncertainty and simulate a range of outcomes. These models can help us better anticipate dynamic conditions and prepare for the unexpected. They give us a better chance of underwriting in a more thoughtful manner, with longer-term sustainability.
Satellite imagery, drones, and predictive analytics can help identify ignition risks—but they’re most effective when paired with human insight.
Technology as a tool—not a silver bullet
Tech is a game-changer for wildfire risk, but it’s not a magic fix. That’s why at Markel, we’re looking for opportunities to bring together leading technology tools, deep human knowledge and experience, and proactive client engagement.
Sure, satellite images, drones, and predictive analytics can spot ignition risks like dry branches or wooden fences. But these tools work best when they’re paired with human insight. That’s why our seasoned loss control engineers are increasingly walking properties with clients, identifying vulnerabilities and recommending tailored mitigation strategies.
AI-powered wildfire detection systems are also making a difference. Systems offered by one supplier, which found over 100 small fires in 2024, gave emergency teams up to an hour’s advance warning before the fires grew larger3.
Across the wildfire landscape, insurers, tech innovators, nonprofits, and property owners are coming together to better anticipate risk and improve outcomes.
Building resilience through collaboration
Here’s some really good news: collaboration is on the rise. Insurers, tech firms, nonprofits and property owners are teaming up to reduce wildfire risks and improve outcomes.
Since 2021, California’s Wildfire and Forest Resilience Task Force has invested nearly $6 billion in projects to make forests healthier and communities safer4. New rules—like requiring ember-resistant zones within five feet of buildings—are being developed to help homes survive wildfires in high-risk locations5.
Rebuilding after a fire isn’t just about putting up new walls. It includes cleaning the soil, burying power lines, and making sure buildings are safe for the long haul. Neighborhoods are working together to use less combustible building materials, and to keep areas around their buildings clear of fire hazards. These efforts can help prevent fires from spreading from one structure to another—reducing risk and fostering a culture of preparedness.
Looking ahead
The LA wildfires underscored the need for a new mindset. At Markel, we believe that resilience comes from challenging old assumptions, embracing innovation, and partnering across sectors. By leading with purpose, the industry can help shape a safer, more sustainable future for both at-risk communities and commercial property insurance.
1 https://www.latimes.com/california/story/2025-07-12/six-months-in-a-checkup-on-the-recovery-and-an-ode-to-l-a-s-marriage-of-beauty-and-danger
2 https://www.anderson.ucla.edu/about/centers/ucla-anderson-forecast/economic-impact-los-angeles-wildfires
3 https://www.risk-strategies.com/blog/how-ai-fire-technology-and-insurers-are-reinventing-wildfire-detection-in-2025
4 https://wildfiretaskforce.org/end-of-year-report-2023/
5 https://34c031f8-c9fd-4018-8c5a-4159cdff6b0d-cdn-endpoint.azureedge.net/-/media/bof-website/projects-and-programs/defensible-space-zones-0-1-2/zone-0-and-resources/fire-safety-zone-zone-0-faq-sept-17-2025.pdf?rev=3d32b0b259b446edbaebcc100857f999&hash=7EEDA159620C240A91689DB32D11DF24