As wildfires continue to rage across Europe, Guy Carpenter is warning that while insured property losses have so far remained relatively limited, the wider economic impact of the fires is expanding.

According to a report published by the broker today, more than 90,000 hectares have burned in Spain during July and more than 50,000 hectares in France. Most fires have affected rural areas, helping contain insured property losses, though losses could rise sharply if blazes spread into more densely populated areas including Madrid or Bordeaux.

The Gironde wildfire forced the evacuation of around 253,000 people, destroyed approximately 240 homes and required the deployment of 2,750 firefighters and 1,500 soldiers.

Guy Carpenter says crop and vineyard damage, smoke exposure, evacuation costs, business interruption and transport disruption are emerging as major loss drivers, highlighting that the financial impact of wildfires extends well beyond property damage.

Julian Enoizi, CEO, Europe at Guy Carpenter, said: "The current fires reinforce two important trends. First, today's insured losses remain relatively contained because many of the fires have affected rural areas, but that picture could change quickly if they spread further into more densely populated regions. Second, the biggest impact increasingly extends beyond property damage, with business interruption, smoke, evacuation, and supply chain disruption all contributing to the economic cost. That's why wildfire is becoming a resilience challenge as much as an insurance challenge."

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