00:00So, what can EU leaders do to keep their citizens from losing everything when wildfires sweep in?
00:05The European Central Bank and European Insurance Regulator have come up with a blueprint
00:10for an EU-level reinsurance scheme.
00:13It's a continental backstop that pulls climate risks together
00:16to keep private coverage available and affordable.
00:20Now, let's bring in our guest.
00:22Janet Ruiz is the Director of Strategic Communications at the Insurance Information Institute.
00:27Janet, thank you so much for your time.
00:30How significantly are these wildfires, the fact they're becoming more frequent, more widespread,
00:38how is it changing the way insurers assess risk?
00:42Thank you, Sally.
00:44We certainly are experiencing hotter, drier, windier climates in so many parts of the world.
00:51So, insurers are turning their focus to predict and prevent.
00:56And we're doing this using sophisticated modeling so that we can look at the future
01:04and not just look back at history as we used to do.
01:09So, we're forward-looking.
01:11We're looking at the topography in areas that are populated because we insure buildings, homes, businesses, etc.
01:21And we're looking at mitigation and how can people prevent their building, their home, their business from burning.
01:32We're also looking at community resilience because when communities burn, their infrastructure burns.
01:41The water pipes may be old.
01:44They may poison the water.
01:46So, we've seen all these things happen.
01:49I'm here in California.
01:51We've seen it happen quite a bit here.
01:53And then it takes communities five, ten years to get back on their feet.
02:00So, predicting and preventing using sophisticated modeling and helping homeowners and businesses mitigate their risk,
02:12become wildfire resistant.
02:15But it takes all stakeholders.
02:17Yeah, it's a good point that you're making.
02:19Everyone has a role to play here.
02:20And it's interesting that the EU is considering a sort of backstop reinsurance method when, you know,
02:26effectively insurance companies add such a premium that they become essentially unaffordable.
02:31And we saw similar things happen during COVID when restaurants and hotels tried to claim.
02:37But what does it mean for the ordinary person?
02:39Is it essentially we better prepare ourselves for general increases in insurance across the board?
02:46We have to work with, you know, the economy.
02:50So, when something burns down and we have to pay to rebuild it, we have to have taken in enough
02:57premium.
02:58Insurance companies buy reinsurance.
03:02Some communities and countries are looking at providing reinsurance to insurers.
03:09So, all these things are coming into play, but we can't change the price to rebuild or to give you
03:18back all your contents.
03:20So, really, putting money ahead into preventing the risks is going to do a lot more long-term to change
03:31this.
03:32And I think that's really the solution in the future is making our structures more wildfire resistant, making the land
03:42around them clear, fire breaks.
03:45Many communities are jumping in and putting fire breaks outside their cities.
03:51It's almost like the walls around the cities we used to see thousands of years ago.
03:58But clearing land, better building materials, getting the builders on board, and then grant programs for people who can't afford
04:09to do that type of work.
04:11I think the money is better spent on prevention than trying to rebuild after.
04:18Yeah, and that's better for the planet as well.
04:20Land management, a key issue.
04:21Thank you so much for chatting to us.
04:22Janet Rose, Director of Strategic Communication at the Insurance Information Institute.
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