Organic forestry, including prescribed burns and removal of small trees and other vegetation in overgrown forests, can reduce property insurance costs while reducing the likelihood of extreme forest fires, according to a report released Wednesday by Willis Towers Watson PLC and The Nature Conservancy
The report Wildfire Resilience Insurance: Quantifying the Risk Reduction of Ecological Forestry with Insurance, said that ecological forest management can lead to reductions in total insurance premiums by 41% for homes.
Researchers at The Nature Conservancy and Willis Towers Watson quantified insurance premium savings by modeling the effects on the control of controlled combustion and ecological thinning of overgrown forests.
The report showed that parametric insurance applied to the intensity and area of fires resulted in a reduction in both losses and premiums and "is an innovative way for insurers to cover fire risk."
Wildfire-related ins Global losses amounted to $ 1
"The latest analysis described in this report provides insurers with tools to incorporate the real value of the risk of wildfire reduction through organic forestry into decision-making," says Nidia Martínez, CEO for climate risk analysis by Willis Towers Watson, in a statement released with the report.