Wildfires: Understanding a growing risk

Wildfire season in the U.S. and Canada typically occurs during the warm summer months. But climate change has led to a gradual warming of the planet and wildfire risk that occurs year-round and in regions that historically have not faced wildfires.

NASA data shows that extreme wildfire activity has more than doubled worldwide in the last 21 years, with extreme wildfires becoming more frequent, more intense, and larger. Earth's warming climate is amplifying this wildfire activity, particularly in northern and temperate forests, including the temperate conifer forests of the Western U.S. and the boreal forests of northern North America and Russia. ¹

Earlier this year, several wildfires decimated large swaths of Los Angeles, burning more than 55,000 acres and destroying 16,250 structures. The fires caused significant economic damage, estimated between $28.0 billion and $53.8 billion in property damage, and are projected to cause $4.6 billion to $8.9 billion in lost economic output over five years. ²

The LA wildfires were caused by a combination of extreme weather conditions and human factors. High winds, dry vegetation, and unusually warm temperatures created a dangerous environment for wildfires to ignite and spread rapidly. ³ While some unpredictable contributors, including lightning strikes and acts of arson, are major factors in wildfire occurrences, the scientific consensus is that climate change will continue to result in larger, more intense fires in regions prone to them.

So, in facing this volatile reality, businesses, communities and individuals need to plan early and intelligently for mitigation, response and recovery efforts (see Wildfire Resource Hub for more information). Before making those plans, however, a general understanding of the nature of wildfires and evolving conditions is helpful.

What causes wildfires?

Wildfires burn over 7 million acres of land in the US annually, with fire suppression costing an average of $3.0 billion, according to from the National Interagency Fire Center.

There are three components required for a wildfire, often referred to as the Fire Triangle:⁴

• A heat source: This can be anything from the sun to a bolt of lightning to a lit match.
• Fuel: This can be any flammable material, including dry, dead grass, leaves and trees; and some forms of living vegetation. 
• Oxygen: Fire feeds off oxygen, which increases in high winds, helping spread the fire. ⁵

Wildfires are a natural — and often essential — part of our ecosystem, but like destructive storms, their power can quickly overwhelm regions and their inhabitants. Moreover, while there are natural triggers for fires, human activity is estimated to be responsible for nearly 85% of wildland fires in the U.S.⁶

Human-caused wildfire triggers include:

• Campfires left unattended
• Intentional acts of arson
• Burning of debris
• Equipment use (including power lines) and malfunctions
• Discarded cigarettes
• Fireworks

Prescribed fires (or controlled burns), set intentionally for a number of beneficial reasons including reduction of more extreme wildfires, have also sometimes gotten out of control. While still considered an important strategy by many experts, a new study finds these managed fires are also significant contributors to air pollution in the southeastern United States – particularly in areas with large minority and low-income populations. The study also finds these air quality impacts could become more pronounced in the decades ahead as the effects of climate change become more pronounced.⁷

Whether natural or man-made, in terms of wildfires growing to uncontrollable levels, the trigger is less important than the conditions for spread and intensity.

Conditions that increase wildfire risks

Our ecosystem is always in a state of delicate balance and there are several factors that can adversely impact that harmony. In terms of wildfire risks, these include:

• Extreme heat
• Droughts
• Insects and disease that cause trees to die prematurely
• Deforestation
• Bad land management
• High winds

Excessive heat, droughts, insects and disease have plagued human and animal life long before climate change was on anyone’s radar, but most of the conditions above have been impacted by or significantly contributed to the effects of climate change.

The historically warmer, drier conditions we are experiencing result in longer heat waves, increased drought, lower soil moisture content, the spread of damaging insects, and an increase in combustible fuels created by dead trees and plants.⁸ Deforestation (mainly caused by logging) and poor land management have resulted in an increase in wildfires in regions where historically they were very rare, notably the rainforests in the Amazon. Analyzing data from 2001-2023, fires in the Amazon region are now burning at least twice as much forest today as they did 20 years ago.⁹

It’s also important to note that wildfires can lead to increased risks for flooding, mudslides and debris flow. In South America, as in many other regions, wildfires can trigger a cascade of secondary perils that extend beyond the initial blaze itself.  The effects of wildfires on vegetation cover and soil stability may create secondary hazards/subsidiary perils, such as post-fire landslides, mudslides, flash floods, erosion and siltation.¹⁰

Types of wildfires

There are three main categories of wildfire:

• Ground fires ignite within the soil, feeding off organic material like plant roots and smoldering until they grow into a surface or crown fire.
• Surface fires burn in dead or dry vegetation, such as parched grass or fallen leaves or branches at ground surface level.
• Crown fires burn through the top layer of foliage on a tree. They are the most intense type of these three and often difficult to control.

Wildfires can also be defined by regions and their associated climates. “Wildfire” has widely replaced “forest fire” as common terminology for wildland fires, but “forest fire” can be useful in distinguishing fires in woodlands from those in grasslands or shrublands. The latter fires are often called “brush fires,” not to be confused with “bushfire,” the common general term for woodland and grassland wildfires in Australia.

Where are wildfire risks growing?

Evaluating wildfire risks globally is tricky and sometimes can be misleading. Frequency is a major concern in some areas, but growing severity and duration can be equally troubling indicators in regions where the overall number of fires may actually be decreasing.

While fatalities are the most tragic immediate outcome of a fire, they are more an indicator of the success or lack thereof in responding to the fire than the level of risk. Small fires that are poorly managed or that ignite unexpectedly can be more lethal than fires of historic size or duration where evacuations of populated areas were effective.

Similarly, immediate man-made conditions — such as the massive, industry-driven deforestation of the Amazon — can be hard to compare from a data standpoint to longstanding and evolving climate-driven conditions, whether driven by human activity or not. 

Countries with the biggest growth in wildfires in 2025

Several countries have experienced a significant increase in wildfire activity in 2025, some even breaking historical records. ¹¹ Some of the countries experiencing significant growth are:

• United Kingdom: The UK has recorded the highest area of land affected by wildfires since records began in 2012, with significant fires in Northern Scotland contributing to record annual carbon emissions. England also saw fires after its driest start of spring in nearly 70 years.
• Canada: Wildfire intensity and emissions in Canada have been consistently above average during the summer of 2025, recently reaching the second highest total estimated emissions on record. Smoke from the wildfires has spread across vast areas of Canada and into the United States, reaching as far as Europe. While overall acres burned are down from 2023, some provinces like Saskatchewan, Manitoba, and Ontario have reported record emissions.
• South Korea: South Korea experienced its deadliest and most intense wildfires in history in March 2025. Fires in the southern regions resulted in significant loss of life and property, burning over 100,000 hectares and quadrupling carbon emissions. Climate change was found to have made these fires twice as likely.
• Southern Europe: Countries in Southern Europe, especially the Eastern Mediterranean and Iberian Peninsula, saw major wildfires in June and July. Greece, Turkey, and Cyprus reported record emissions, while Serbia and Albania recorded their second-highest July emissions on record.

The areas above are by no means the only ones facing escalating wildfire challenges. Wildfire activity outside the U.S. in 2025 is exhibiting concerning trends, with increased frequency and severity in various regions. Unusual fire activity is being reported in Europe, including the UK, Ireland, and parts of mainland Europe, with unusually warm and dry spring conditions. In Asia, South Korea experienced record-breaking blazes. Globally, there's a trend of expanding fire seasons and larger burn areas, largely attributed to climate change.

Economic impacts of wildfire

The global economic impact of wildfires in 2025 is significant, with losses estimated to be between $95 billion and $250 billion, according to multiple sources, however, the exact total is unknown due to several factors, including evolving assessment methodologies and ongoing fires. This figure includes both direct costs like property damage and indirect costs like economic losses and potential impacts on human lives. ¹²

Indeed, wildfires have far-reaching impacts that extend beyond the immediate burned areas and can have significant long-term consequences.

• Smoke and Air Quality: Wildfire smoke travels far and wide, impacting air quality and public health in regions distant from the actual fire. This leads to increased healthcare costs, lost productivity due to illness, and diminished quality of life for affected populations, regardless of political boundaries.¹³
• Supply Chain Disruptions: Wildfires can damage infrastructure, close transportation routes, and disrupt key industries (e.g., agriculture, manufacturing) affecting regional and international supply chains. This can lead to increased costs, delays in goods and services, and potential shortages that ripple across interconnected economies.
• Insurance Costs and Risk Management: As the frequency and intensity of wildfires increase, insurance premiums in affected regions tend to rise, potentially impacting homeowners and businesses in a broader area as insurers reassess risk profiles. Some insurers are even reducing coverage in high-risk areas.
• Lost Economic Opportunities: Tourism, recreation, and related industries can suffer in areas affected by wildfires or smoke, even if the primary fire is in another jurisdiction. Reduced real estate values and potential out-migration can also contribute to long-term economic shifts.

With the interconnected nature of countless businesses, both domestically and globally, it isn’t hard to see why costs are not contained by state or national borders. Supply chain interruptions, rising insurance losses, and the potential impact on workforces of growing migration away from wildfire-prone regions are just some of the issues to contend with.¹⁴

As with hurricanes and more extreme storms, wildfires are events that require both long-term and immediate planning. Zurich will continue making resources available to help with that planning, including the articles below offering guidance on mitigation, response and recovery actions.

Resources

1 “Wildfires and Climate Change - NASA Science.” August 6, 2025.

2. “Impact of 2025 Los Angeles Wildfires and Comparative Study.” Southern California Leadership Council, Los Angeles County Economic Development Corporation. 19 February 2025.

3. The weather and climate influences on the January 2025 fires around Los Angeles.” NOAAClimate.gov

4. “How much land do wildfires burn in the US?” USAFacts.org. 28 January 2025.

5. “Wildfire Causes and Evaluations.” U.S. National Park Service 2025

6. “Climate Change May Make Prescribed Fires Rarer – but Increase Their Air Quality Impacts.” NC State University. 18 June 2025.

7. “Climate Change May Make Prescribed Fires Rarer – but Increase Their Air Quality Impacts.” 18 June 2025

8. “Introduction to wildfires.” Open Geography Education. 2025.

9. “South America’s Forest Fires, Explained.” World Resources Institute.2024

10. “How wildfires leave communities vulnerable to flooding, mudslides for years.” Accuweather. 2025

11. “France Joins Canada, North US, Greece, Spain and Turkiye as Hellish Wildfire Destroying the Economy, How Tourism is Going Right Now.” Travel and World Tour. 6 August 2025.

12. “The invisible costs of wildfires: What is the true financial impact?” 18 July 2025.

13. “Environmental Health Impacts of Wildfires.” UCDavis. 24 May 2023.

14. Key Impacts of Wildfires on Supply Chains.GEP December 2024