The key to preventing disasters like January’s wildfires in California lies in in more fire-savvy building codes, an expert told the ILS Bermuda Convergence 2025.

Instead of tightening building codes, California is relaxing some requirements in an effort to get the community back on its feet more quickly, said Levi Blair, managing director of Ember Peak, a California investment advisory firm focusing on wildfires.

He said one mitigation technique is to build homes further apart.

“Structures that are between 20 and 30 feet of each other are at the highest risk,” Mr Blair said.

He talked about the Palisades fire, which destroyed 37,000 acres, 16,000 structures and killed 12 people.

It is now considered the tenth most destructive fire in American history and caused an estimated $25.2 billion in insurance losses.

Mr Blair explained that when the heat from one house fire reaches a certain point it can easily set alight the structure next to it.

Many Palisades homes are built very close together, often ten to 15 feet apart.

Earlier this year, California governor Gavin Newsom streamlined approvals for like-for-like replacement homes, which can be approved with certain modifications up to 10 per cent larger than the original structure.

Mr Blair said some homeowners do not care about making their homes more resistant to wildfires.

“They have certain aesthetics about their property that they want to be there,” he said. “Hardening their property for wildfire risk is not at the top of their list.”

New building codes for wildfire resilience are being developed, but will take decades to take root, he said.

“Wildfires are not going to stop happening, but we can do a better job preventing the fires from occurring,” said Gregory Zarin, founder and chief executive of SubroSmart.

Mr Zarin’s firm provides subrogation management services for global insurers and captives, focusing on recovering costs from at-fault third parties after a claim has been paid.

“We can do a better job fighting the fires,” he told an audience at the conference.

Some fires are caused by a natural event, such as lightening, while are others are directly, or indirectly, caused by human behaviour and infrastructure.

He worked on one fire that was caused by a 104-year-old piece of equipment.

“Making sure that the equipment there is up to standard is really important,” Mr Zarin said.

The cause of the Palisades fire has not yet been proven, but some lawsuits allege that power lines may have been a contributing factor.

“Probably 90 per cent of our wildfire work is related to the liability component,” Mr Zarin said. “It is about the ignition source, what happened and could it have been prevented. We look at whether it rises to the standard of negligence. Was it caused by a third party?”

The 2025 California wildfires have had a severe impact on the insurance market by causing massive financial losses for insurers. This has lead to significant premium increases and withdrawal of coverage, among other things.