France fires
Residents look at the sky illuminated by wildfires in Le Porge, south-western France early on July 23, 2026. Getty Images

With wildfires ravaging France and Spain, insurers are warning that the costs of such disasters are increasingly outpacing insurance coverage.

CNBC reported that Swiss Re's Chief Financial Officer Anders Malmström warned of the growing "protection gap." Malmström said that, in terms of natural disasters, Europe lags behind in protecting itself when compared to the U.S. or Australia.

"There is still a protection gap, particularly in Europe, which means there's a lot of wealth here, but it's not protected through insurance. But it always starts with assessing the risk, then mitigating the risk, and then you can price the risk and make sure that insurance covers the residual risk here," Swiss Re's Chief Financial Officer Anders Malmström told CNBC.

Wildfires have been sweeping through the south of France and western Spain for weeks, destroying thousands of acres. In the south of France alone, more than 224,000 people were evacuated, and many remain displaced, the Associated Press reported. In Gironde, France, authorities said that although the wildfire was still smoldering, it was no longer growing beyond the 162 square miles it had already affected.

Authorities are also battling wildfires in the United Kingdom, Turkey, and Greece. The AP reported that repeated heatwaves in Europe, dry conditions, and high winds had created a tinderbox.

Read more

Malmström told CNBC that more people and wealth have flowed into vulnerable areas, increasing potential cost and risk.

"So you have this combination of both, more events with a higher kind of impact. At the same time, you have more that you need to protect in these areas, and that together increases the risk overall for society," Malmström told CNBC.

Zurich Insurance Group's CEO Mario Greco said that while weather events are insurable, they are increasingly costly and more needs to be done to increase safety.

"We have a lot of experience from the U.S. and Australia that wildfires can be prevented, can be mitigated, but they require systemic intervention, which often countries, local jurisdictions, governments-they're not ready to do because they don't really visualize, they don't feel the risk yet, but the risk is there," Greco said in an interview with CNBC's Carolin Roth