What Los Angeles fires teach Australian insurers about bushfire risk

Panel discussion ignites calls for bushfire policy overhaul

What Los Angeles fires teach Australian insurers about bushfire risk

Catastrophe & Flood

By Roxanne Libatique

Recent wildfires in Los Angeles have brought attention to the pressing need for integrated risk reduction strategies – combining land-use planning, insurance frameworks, and community preparedness.

During a webinar hosted by the Bushfire and Natural Hazards Research Australia, researchers and policymakers from Australia and the US examined the dynamics of the 2021 Palisade Fire and discussed risk management strategies applicable to the Australian context.

Analysis of Los Angeles wildfires

Dr Faraz Hedayati, lead research engineer at the US-based Insurance Institute for Business and Home Safety, provided an analysis of the event, describing how weather patterns and infrastructure contributed to the fire’s progression.

He noted that prolonged drought, dry vegetation, and wind speeds reaching 120 km/h made containment efforts difficult. These conditions accelerated the fire’s growth significantly, with 70% of the Palisade Fire’s total area burning in just 14 hours.

  • the condition of the natural landscape
  • the characteristics of the built environment
  • the preparedness of individuals and emergency services

One of his key findings involved the role of structure spacing, with increasing the separation between buildings to at least 12 metres reducing the likelihood of fire transmission significantly.

Lessons from Los Angeles wildfires

Australian contributors to the panel included CSIRO bushfire researcher Dr Raphaele Blanchi, National Emergency Management Agency Director Joe Buffone, and Natural Hazards Research Australia CEO Andrew Gissing.

The discussion focused on enhancing local policy through a combination of engineering standards, education programs, and spatial planning.

Blanchi, who leads a CSIRO initiative on bushfire-resilient housing, emphasised that building design alone is insufficient.

Key points raised for the Australian market included:

  • updated construction codes to address vulnerabilities in high-density residential areas
  • urban planning approaches that factor in fire behaviour and structure proximity
  • community engagement on bushfire awareness and the importance of maintaining defensible zones around properties

In a related development, the Insurance Council of Australia (ICA) responded to the Los Angeles fires in a public statement, framing them as a broader signal of increasing hazard risk.

The ICA described the LA wildfires as a reflection of growing global exposure to climate-influenced disasters. It said rising asset values and population growth in vulnerable locations compound the challenge for the insurance and reinsurance sectors.

The council reiterated the importance of proactive mitigation to help contain insurance affordability concerns.

“There is no simple solution to this problem, but as an industry that prices [risk], the most sustainable way to reduce rising pressure on insurance [premiums] is to reduce the underlying risk,” it said.

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