From Wildfire Risk to Resilience The Investment Case for Action 2026

Pathways for investment and action4 Empirical evidence informs four sets of actions to advance wildfire resilience. To advance wildfire resilience, action should focus on four interconnected pillars: 1) finance and insurance, 2) nature-based solutions, 3) data, technology and governance, and 4) community and multistakeholder coordination. The case studies presented in support of these themes were collected by the World Economic Forum in late 2025, and information was provided via interviews unless otherwise cited. 4.1 Finance and insurance: converting prevention into price and capital Wildfire resilience becomes investable when prevention, mitigation and reactive adaptation benefits are visible, verified and measurable. Prevention remains underfunded for many different reasons, including limited awareness and the upfront affordability of interventions, while the payoff comes mainly through avoided losses, which can be harder for investors to value and compare against alternative, yield-generating investments. As insurers retreat from high-risk markets, taxpayers absorb fiscal exposure. Standardized avoided loss metrics, community aggregation and aligned multi-party financing can move capital upstream, making prevention investable and self-reinforcing. The American Forest Foundation (AFF), in collaboration with Pacific Gas & Electric (PG&E), Blue Forest and other partners, leads an innovative pilot in Tuolumne County that aims to reduce wildfire risk and enhance energy resilience on family-owned forest lands adjacent to critical infrastructure. This “stacked benefit” model combines multiple revenue streams to finance hazardous fuels reduction at scale. Around Lake Tahoe, WTW and TNC created a $2.5 million HOA insurance policy that rewards verified forest treatments, cutting premiums by 39%.82 By linking thinning and prescribed burns to reduced losses – estimated at 40–60%83 (modelled) – the model shows how measurable prevention can directly influence pricing, supported by county-level data commons that give insurers and communities a shared view of risk. Factory Mutual (FM) combined engineering-led credits with underwriting levers, reducing $30 billion in climate-related loss exposure in commercial lines, and returning $1.4 billion to clients over recent years. Their experience suggests that the return on investment (ROI) from loss prevention was realized not only from loss avoidance, but also coverage continuity and client retention. Guidewire (HazardHub) analysed the California Department of Forestry and Fire Protection’s (CAL FIRE) damage-inspection data (DINS) across 91,800 California home inspections and found that bundled home hardening and mitigation measures (captured as a “resiliency score”) are associated with materially lower wildfire losses. For example, adopting three resiliency points reduced expected loss by approximately 20–25%, while a score of 13 reduced expected loss by more than 70%. This kind of evidence base can support insurance incentives (e.g. credits) tied to verified mitigation actions.84 CASE STUDY 1 Financial mechanisms for wildfire risk reduction From Wildfire Risk to Resilience: The Investment Case for Action 18