Brushfire and wildfire models

The insurance industry’s losses due to wildfires are rising. Escalated wildfire severity and expanded exposure in wildfire-prone areas, alongside an increase in reconstruction costs, have all contributed to devastating impacts on insurers’ bottom lines. Shifting regulatory landscapes and market dynamics add to wildfire risk management’s complexity.

Among other lessons, recent wildfires have highlighted the importance of enhanced wildfire risk modeling for underwriting entire portfolios, pricing and underwriting individual policies, reinsurance purchasing, and capital adequacy.

Moody’s can help you gain perspective on wildfire risk to enhance pricing accuracy, achieve a stronger position in the market, and outperform the competition. From better risk selection to risk-appropriate pricing, our wildfire modeling capabilities can help you quantify mitigation impacts for a more complete picture of wildfire risk.

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What we do

Moody’s RMS™ wildfire modeling accurately characterizes fires as they start and travel by accessing factors that drive ignition and spread, including wind and vegetation presence. This helps insurers, reinsurers, governments, and financial institutions differentiate safe structures from dangerous ones, conduct risk assessments, estimate potential losses, insightfully price fire risk, and optimize risk transfer.

Improve portfolio management

Monitor and manage a portfolio’s risk accumulation to perform stress testing for potential losses and protect from insolvency as well as identify growth opportunities in an ever-changing wildfire risk landscape.

Enhance risk selection and pricing

The latest fuel data, historical fire databases, and burn probability maps improve hazard modeling’s and risk differentiation’s accuracy and relevance. Our models capture the state of “physical risk to date,” which allows for insightful simulation of fire weather parameters while enhancing the model’s utility in adapting to current and future conditions.

Understand the impact of wildfire mitigation

Model utility-related ignitions and the measures to mitigate these risks, emphasizing the importance of incorporating mitigation strategies into risk assessments.

Speak to our team today

Interested in learning more about our offerings? Our solutions specialists are ready to help.

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Testimonial

The stochastic modeling information Moody’s gave us is powerful. We’re now able to prioritize where we do mitigation work with a data-driven approach. We are able to understand bands of uncertainty in our assumptions, and, more importantly, rigorously test and challenge them.

— Robert LeMoine
Director of Enterprise Risk Management, Insurance, and Data Analytics, Southern California Edison

Introducing the Moody’s RMS U.S. Wildfire HD Version 2.0 Model

The new Moody’s RMS U.S. Wildfire HD Version 2.0 Model will mark a significant advancement in the field of wildfire risk assessment.

Julie Serakos, Head of Model Product Management, shares how this updated model will provide a better representation of risk and introduces dynamic features that allow for better representation of hazard over time.

How we help

01 Model coverage

Model coverage

Moody’s RMS™ North America Wildfire HD Model provides comprehensive coverage for wildfire risk across the contiguous United States, Hawaii, and 10 Canadian provinces.

02 Advanced hazard modeling

Advanced hazard modeling

The model incorporates the latest fuel data, historical fire databases, and burn probability maps, maintaining accuracy and relevance in hazard modeling.

03 Robust stochastic event catalogue

Robust stochastic event catalogue

Our stochastic catalog includes 100,000-year fire weather and extreme wind speed simulations and results in over 160 million heat, ember, and smoke footprints in the United States. This comprehensive dataset, combined with improved ignition modeling at the community and location levels, facilitates in-depth risk analysis, particularly in understanding the tail risk profile associated with wildfires.

04 Extensive vulnerability curve

Extensive vulnerability curve

The model’s refined damage curves allow for a more accurate estimation of potential losses and a finer differentiation of risk, enhancing its utility for wildfire risk underwriting by maintaining a high degree of accuracy.

05 Enhanced secondary modifiers

Enhance secondary modifiers

The model incorporates credits for local wildfire risk reduction measures. The expanded list of modifiers allows users to evaluate the effectiveness of mechanical thinning techniques and other property and community hardening measures.

06 Urban conflagration modeling

Urban conflagration modeling

Moody’s specifically calibrated its urban conflagration modeling to assess built environments’ vulnerability to wildfires. This module, with its increased number of simulations, addresses the uncertainties in urban conflagration modeling, providing a more insightful assessment of urban fire risk.

07 Specialty models

Specialty models

Expanded secondary modifiers and the introduction of specialty models provide targeted insights for various risks. These additions allow for a nuanced evaluation of mitigation measures and compliance with evolving regulatory requirements, offering tailored solutions for specific sectors or exposure types.

Who we help

Underwriters

By using industry-leading science, data, and technology, we enhance underwriting decision-making across multiple segments and lines of business. Our solutions help underwriters price risks with speed and confidence, modernize workflows, unify risk analytics, and overcome private-entity data gaps.

Where we help

Regional and country wildfire models

News and views

Quantifying avoided loss to hard infrastructure from hazardous fuels reduction

Quantify how forest treatment mitigation and resiliency measures can lower wildfire risk.

Learn more

whitepaper

Jan 31, 2025

Moody's

Implications of Southern California wildfires for banks' real estate portfolios

During the week of January 6, 2025, there were up to six wildﬁres burning in the greater Los Angeles area. The ﬁres have had a devastating toll in terms of loss of life and property as well as disruption to businesses and communities. The largest two ﬁres are the Palisades ﬁre in Paciﬁc Palisades, covering 23,448 acres at the time of writing, and the Eaton ﬁre, covering 14,021 acres as of January 27, including in Altadena and Pasadena.

blog

Jan 17, 2025

Moody's

Live blog: Southern California wildfires

Keep updated with the latest information and insights from Moody's RMS Event Response and our wildfire experts.

whitepaper

Nov 15, 2020

Moody's

Application of wildfire mitigation to insured property exposure

To quantify the benefits of certain wildfire mitigation features, this study uses the Moody’s RMS North America Wildfire Model to quantify hypothetical loss reduction benefits in nine communities across three Western states: California, Colorado, and Oregon.

blog

Aug 19, 2024

Moody's

Hawaii wildfires: reflections on the first anniversary, new insights, and innovations for the insurance sector

The scale and intensity of the devastating 2023 wildfires in Hawaii not only underscored the vulnerability of the island’s communities but also laid bare the challenges and opportunities the insurance sector faces in addressing and managing wildfire risk.

blog

May 31, 2024

Moody's

Shaping the future of wildfire insurance in California: new insights from the most comprehensive wildfire risk model in the market

Wildfire insurance coverage struggles to evolve as regulatory frameworks have hindered the use of risk analytics tools such as catastrophe wildfire models in the rate-making process.