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France and Spain wildfires seen as modest drag on 2026 insurer earnings
Fitch says structural damage is low so far, and it does not expect rating changes unless insured losses exceed EUR 2 billion in either country.
Fitch Ratings expects the ongoing wildfires in France and Spain to have limited impact on the 2026 earnings of large European insurers, assuming the fires do not spread into major urban, residential, or industrial hubs, according to Reinsurance News.
As of late July, the fires had burned around 117,000 hectares in France and more than 200,000 hectares in Spain. The report cited nearly 300,000 evacuations and several fatalities, while noting that reported structural damage remains low versus historical benchmarks.
Fitch said that barring additional follow-on events, especially near large cities such as Bordeaux or Madrid, the effect on 2026 earnings should be modest and should not translate into rating implications for most large European insurers.
The rating agency added that property catastrophe reinsurance trends are still expected to soften broadly, but pricing could become more differentiated for high-risk areas or for cedants with weaker prevention and exposure management. It also said state-backed compensation schemes provide limited support for these events, with private insurance, private reinsurance, and uninsured losses remaining the main loss allocation channels. Fitch set an earnings-risk threshold, saying 2026 targets are unlikely to be at risk unless insured losses exceed EUR 2 billion in Spain or France.