From Wildfire Risk to Resilience The Investment Case for Action 2026

Building a framework for investing in resilience3 Wildfire resilience can be advanced through a continuous, data-driven system that links actions to prevent, reduce and recover from losses into one investable cycle. When risk-reduction actions generate verifiable proof, that proof alters the economics of insurance, capital and recovery, creating a feedback loop where actions leave evidence, evidence influences price and price influences capital. Resilience finance is different from traditional finance from a return perspective because the return is essentially avoiding loss. Multiple studies point to a high loss avoidance return from wildfire prevention intervention. –The National Institute of Building Sciences (NIBS) finds that in the US WUI, above-code wildfire mitigation can yield about $4 in avoided losses for every $1 spent.66 In addition, stronger building requirements can improve life safety and expedite functional recovery, supporting social benefits alongside avoided losses.67 –The US Forest Service’s review of 85 studies found that 86–94% of modelled landscape fuel-treatment scenarios reduced fire intensity or damage relative to untreated areas.68 When avoided losses materially exceed spend and treatments reliably reduce modelled fire impacts, the rationale for acting before ignition becomes hard to ignore, setting the foundation for a resilience system in which prevention, mitigation and adaptation reinforce one another. Prevention: financing risk reduction up front Communities can reduce ignition and exposure through fuel management, home hardening and detection networks, but these activities require capital before losses occur. Capital can be deployed through retrofits for existing structures or by building back to a better (more resilient) standard for new construction or rebuilds following a disaster. In general, upgrading to a more resilient standard is often more affordable at the point of construction than through retrofits. For example, Wildfire Prepared Home (Base/Plus) is estimated to add around 2–3% (approximately $15,000) to a mid-range new build/rebuild in Altadena,69 while retrofitting an existing roof can cost up to around $22,010 (model home).70 Different financing mechanisms can be deployed to fund proven fire prevention interventions. For example, blended-finance models (e.g. Forest Resilience Bond) can provide upfront liquidity, with multiple beneficiaries repaying over time. Similarly, insurance structures can recognize verified risk reduction and translate it into improved pricing and/ or availability, as illustrated by the wildfire resilience insurance launched by Willis Towers Watson (WTW) and The Nature Conservancy (TNC). When measurement, reporting and verification (MRV) confirm performance, repayments or savings can be recycled to finance additional resilience measures.71,72 Mitigation/suppression: ensuring rapid liquidity and operational readiness Proactive, landscape-scale mitigation, including nature-based solutions and preparedness measures like building strategic fuel breaks and road networks, reduces fire severity and improves response effectiveness. For fire-adapted ecosystems, reintroducing cultural and prescribed burning can reduce fuel loads and limit extreme fires. When fires do occur, speed determines the scale of damage. Prepositioned assets and parametric triggers can provide rapid liquidity to agencies and utilities, enabling early response and continuity of operations. They have the potential to stabilize cash flow, shorten recovery and generate post-event data that improves risk and loss models over time. Resilience can be enhanced by linking prevention, mitigation and adaptation into an investment cycle. 3.1 Building a continuous resilience system From Wildfire Risk to Resilience: The Investment Case for Action 14