A Framework for Wildfire Prediction and Loss Assessment: Potential Application in the Financial Sector—Case Study in Yunnan

The paper presents a wildfire prediction and loss assessment framework designed for the financial sector, using a case study of five crops in Yunnan Province. It finds that historical annual losses for these crops ranged from US$135.8 million to $254.8 million between 2011 and 2020, with extreme events causing 15 to 30 percent of annual losses. Future projections indicate a shift in the peak Fire Weather Index (FWI) from March/April to February/March, with the SSP2-45 scenario showing the highest mean FWI. The study notes that financial institutions in Yunnan lack the capacity to manage these risks, though insurance companies and banks show interest in integrating physical climate risk analysis for parametric insurance and credit risk management.

• Between 2011 and 2020, annual historical losses from wildfires for five target agricultural crops in Yunnan Province were estimated between US$135.8 million and $254.8 million. Extreme wildfire events are particularly impactful, accounting for 15 to 30 percent of these annual losses and posing significant threats to smallholder farmers.
• Future climate projections for Yunnan Province indicate a shift in the peak regional mean Fire Weather Index (FWI) from March and April to February and March. Among the tested scenarios, Shared Socioeconomic Pathway (SSP)2-45 is projected to have the highest mean FWI, followed by SSP1-26, SSP3-70, and SSP5-85, all of which exceed observed values.
• Financial institutions in Yunnan currently face challenges regarding their readiness and capacity to manage climate-induced risks. While banks seek climate risk analysis tools for credit risk management and insurance companies are interested in developing catastrophe and parametric insurance products, stress testing remains resource intensive.

APA

World Resources Institute (n.d.). A Framework for Wildfire Prediction and Loss Assessment: Potential Application in the Financial Sector—Case Study in Yunnan. https://www.wri.org/research/framework-wildfire-prediction-and-loss-assessment-potential-application-financial-sector

Chicago

World Resources Institute. A Framework for Wildfire Prediction and Loss Assessment: Potential Application in the Financial Sector—Case Study in Yunnan. n.d. https://www.wri.org/research/framework-wildfire-prediction-and-loss-assessment-potential-application-financial-sector.

Wikipedia

{{cite report |author=World Resources Institute |title=A Framework for Wildfire Prediction and Loss Assessment: Potential Application in the Financial Sector—Case Study in Yunnan |url=https://www.wri.org/research/framework-wildfire-prediction-and-loss-assessment-potential-application-financial-sector |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendframework, author = {{World Resources Institute}}, title = {{A Framework for Wildfire Prediction and Loss Assessment: Potential Application in the Financial Sector—Case Study in Yunnan}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/framework-wildfire-prediction-and-loss-assessment-potential-application-financial-sector}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }