European insurers face mounting losses as severe wildfires sweep across France, Spain and Greece, exposing the narrow margins in high-risk property coverage. France's 2024 fire and hazard insurance data show how quickly claims can approach premiums, raising concerns over insurers' capacity to absorb escalating climate-related losses and maintain coverage in increasingly vulnerable regions, reveals GlobalData, a leading intelligence and productivity platform.

GlobalData's Global Insurance Database shows that natural fire and hazard premiums totaled $2.4 billion in France in 2024 with claims at $2.2 billion; a difference of just $218 million. This highlights how thin the margins can be in this high-risk line and illustrates how difficult 2026 will be for insurers.

The wildfires are still ongoing in France and could get considerably worse if they get even closer to cities such as Bordeaux, where they have already caused a great deal of disruption.

Ben Carey-Evans, Senior InsuranceAnalyst at GlobalData, explains: "It is yet more evidence that insurers around the world should be extremely concerned by climate change and the impact of severe weather events. A GlobalData poll on Verdict Media sites in May 2024 found that 25.0% of respondents believed severe weather events to be the greatest risk to the insurance industry, which placed it second behind cyber threat. While this is a couple of years old, severe weather events is only more of an issue now and it highlights how it has been a key concern for insurers over a long period of time."

Reportedly, wildfires in France are not covered by its state-backed compensation scheme (which only covers floods and droughts). Therefore, all the burden will fall on insurers.

Carey-Evans concludes: "The long-term risk here is that insurers pull away from personal and commercial policies in high-risk areas and large areas of land and population become uninsurable.

"This is one of the most-pressing issues in insurance, with more serious events becoming increasingly likely every year. Insurers and governments will need to work out how they can continue to insure increasingly large areas, with many communities and businesses at risk."