What Are the Most Effective Ways to Insure and Mitigate Wildfire Risks?

Climate change has led to extreme wildfires in the past few years, devastating regions from California to Australia. These are some of the most expensive disasters to slam the insurance industry. To design an effective strategy for reducing future losses from wildfires, communities, insurers and policymakers must collaborate to find solutions, write Howard Kunreuther and Erin St. Peter in this opinion piece. Kunreuther is an emeritus professor of decision sciences and public policy at Wharton and co-director of the school’s Center for Risk Management and Decision Processes. St. Peter is a research analyst in Wharton’s real estate department and the risk center.