1、Nickolas A.AlvaradoMary DalyCedric ChamberlandWILDFIRE RISK MANAGEMENT AND FINANCIAL FORECASTINGEstablishing effective strategies amid new legislationWildfire Risk Management andFinancial Forecasting Oliver Wyman2Wildfires are costly events that severely impact communities and lead to significant ec

2、onomic losses.They are also expected to become more frequent due to climate change.While some wildfires occur naturally,the US National Park Service estimates that 85%of all wildfires are caused by human activity.1 Additionally,a 2022 report from the California State Auditor found that about 10%of w

3、ildfires in California from 2016 to 2022 were linked to electrical power generation.2 Over the past decade,electric utilities essential companies that provide power to modern civilization have been held liable for causing wildfires that resulted in massive losses.In response to the increasing wildfi

4、re risk and the critical role utilities play in daily life,many states have proposed bills or enacted laws that affect the liability these utilities face when they are responsible for wildfires.As public utilities,energy companies,and state governments navigate these legislative changes,its critical

5、 to utilize actuarial services to establish effective risk management,forecast potential liabilities,and institute funding models.This approach can help ensure financial stability during these challenging times.Our article reflects on common causes and impacts of wildfires from the past 10 years and

6、 presents an overview of pending and passed legislative solutions in 2025.We also explore wildfire exposures and the potential liabilities for utility companies,and offer effective risk management solutions to mitigate this risk.With a global team of over 600 professionals,including more than 300 cr