Insurance does not solve the wildfire problem — because by the time a claim is filed, the decisive choices have already been made. That was the argument put forward by Zurich Insurance CEO Mario Greco in remarks circulated this week, shared via X, in which he described what he calls a "configuration trap" behind wildfire economics.
Greco's point is uncomfortable for anyone who treats coverage as a safety net rather than a signal. "This is not the first time it happens," he noted, citing wildfires two years ago and four years ago. Then the sharper line: "With the way we configured some cities, Los Angeles is one... we are at high risk, and the insurance cannot resolve this." The risk, in other words, is embedded in how places and buildings are put together — long before the smoke arrives.
The risk is designed in, not priced in
The insight cuts against a widespread assumption that insurance is a mechanism for absorbing loss after the fact. Greco reframes it as a mechanism that prices a risk it cannot alter. When a city's housing stock is configured with combustible frames, vulnerable openings, and dense adjacency, the underwriter is not evaluating a random event — they are evaluating a near-certainty on a long enough timeline.
Wildfire two years ago, four years ago — Greco's framing: repeated cycles, not isolated shocks.
Los Angeles named directly as a high-risk configuration.
"Insurance cannot resolve this" — the loss is decided upstream of the policy.
This aligns with what building-science research has established. The Insurance Institute for Business & Home Safety finds that most homes ignite not from a wall of flame but from embers and from combustible materials in immediate contact with the structure. That reframes the problem from geography to assembly: two homes on the same ridgeline can face radically different outcomes based on what they are made of and how their edges are detailed.
California's regulatory framework has begun to encode this. The California Department of Insurance's Safer from Wildfires program requires insurers to offer discounts for specific mitigation measures — precisely because the structure's configuration, not just its location, drives loss probability.
What this means for the Los Angeles market
For anyone commissioning or rebuilding a home in the Westside fire corridors, Greco's remarks reframe the insurance conversation entirely. Chasing a policy is chasing a symptom. The variable an owner actually controls is the one that sits upstream of every premium quote: how the house is configured against ember intrusion and radiant heat.
The insurer can price the risk. Only the builder can remove it.
This is also why the 2026 California WUI Code matters beyond compliance. Mandatory for new builds in Fire Hazard Severity Zones, it pushes non-combustible envelopes, ember-resistant vents, and Class A roofs from optional upgrades into baseline expectations. The market is slowly catching up to what Greco states plainly — that a configuration built to burn cannot be underwritten out of its nature. A home built not to burn changes the equation at the source.
The uncomfortable corollary: in a repeated-cycle environment, the cheapest home to insure over its lifetime may be the more expensive one to build. Configuration is a one-time decision; premiums are forever.
Looking ahead
If Greco is right, the next phase of California's insurance story will not be written by carriers at all — it will be written by the people deciding how homes are configured today. As underwriting increasingly rewards non-combustible construction, the design of a house will quietly become the most consequential line item in its long-term insurability.