From Wildfire Risk to Resilience The Investment Case for Action 2026

Design principles for scalable finance and insurance mechanisms These principles describe what empirical evidence suggests is likely needed to translate verified risk reduction into pricing, capital and repeatable programmes. Not every principle applies to every case. –Beneficiary-specific value: Each payer funds outcomes most relevant to their mandate. –Measurable results: Prevention is tracked through verifiable indicators of avoided loss and effective resiliency interventions. –Scale through aggregation: Community/ municipal pooling stabilizes loss ratios and allows financing bodies to manage risk at scale. –Fit-for-risk planning unit: Plan interventions at the unit that drives loss in that context (property, community or landscape). –Establish standards: Evidence-based standards, such as wildfire-specific resilient building and community characteristics, verification protocols and building codes, enable insurability and financing. –Public-private balance: Early guarantees, policy incentives and investment by the public sector and philanthropy help to de-risk innovation for private sector investment. –Complementary markets: Link prevention work to complementary markets within the ecosystem (such as biomass) to support continued economic vitality. –Open data integration: Interoperable data commons ensure consistency and trust among partners. –Risk-based pricing and incentives: Pricing and coverage availability reflect underlying risk. Higher-risk properties face higher premiums and/or reduced availability, while lower-risk properties are generally offered lower premiums. Verified preventative action is rewarded through premium credits, improved terms or greater availability, helping avoid moral hazard. Putting the pillar into practice TABLE 3 Sample outcome metrics Partners Instruments Policy enablers Environmental (e.g. flame length, rate of spread, water yield/sedimentation), human, social and health (e.g. claim- settlement time, underinsured or uninsured property owners), economic and financial (e.g. avoided losses, premium change, loss-ratio improvement, capacity stability), cross-sector and regional (e.g. number of buildings hardened)Utilities, large corporates, insurers/reinsurers, agencies, communities and Indigenous groups, municipalities, property owners, investors, implementers, and data providersResilience bonds and revolving funds, resilience-linked riders, build-back-better insurance endorsements and coverage continuity for resilient properties that meet appropriate prevention standards, community/ parametric covers, public reinsurance backstops (CATNAT)5–10-year multi-payer “pay-for- results” agreements, procurement templates, concessional/first- loss capital for early phases, codes and standards, and public education campaigns Key takeaways –Prevention can be priced and financed when co- benefits are converted into bankable contributions. –Resilience finance is repeatable through long- term, multi-payer, metrics-tied finance that is replicable and can be adapted across regions. –The loop can be closed by pairing resilience bonds with resilience-linked insurance, restoring capacity, stabilizing tax bases and turning prevention into a core product feature. From Wildfire Risk to Resilience: The Investment Case for Action 19