How urban conflagration works and why it matters for Australia (Part II)

Author: Iuliia Shustikova, Product Manager - Insurance, Moody's

This blog is the second part in a two-part series. To read the first blog, click here.

 

Australia’s bushfire environment is unique. The vast scale of flammable vegetation types, e.g., eucalyptus forests, coupled with extreme fire weather conditions (captured in the Fire Danger Index), creates one of the most fire-prone landscapes globally. 

What differentiates Australia today, however, is the encroachment of suburban and peri-urban development into bushland edges—what’s known as the Wildland–Urban Interface (WUI). Up to one million Australian homes are located in bushfire-prone areas and lack fire protection.

The key question is not “Will UC happen?” but rather “Are conditions emerging that make UC more likely in a warming, expanding Australia?”

To be clear: a full-scale UC as seen in the U.S., such as the Palisades Fire in Southern California (2025) or Lahaina, Hawai'i (2023), remains a rare, tail-end event.

Yet its possibility grows as urban density, climate variability, and infrastructure interdependencies increase. Let’s look at why.

 

1. Shifting the envelope of risk

Recent research has confirmed changes that are amplifying the frequency and severity of fire weather. There is an increase in extreme fire weather and a longer fire season trend across large parts of the country.

Furthermore, extreme fire days are becoming more clustered, increasing the chances of simultaneous ignitions and suppression overload. Events like the 2019–20 Black Summer Fires demonstrated that multi-fire outbreaks under strong synoptic drivers can stretch even Australia’s well-resourced fire services to their limits.

This clustering increases the likelihood of loss of control zones—areas where a fire breaches containment lines or penetrates deep into urban areas, especially under strong northerly or westerly wind regimes in eastern states.  The clustering increase also means there are more opportunities for a bushfire to ‘cross the line’ and to become a UC.

 

2. Ember transport and favorable wind conditions

During extreme fire weather days, sustained wind speeds above 40–60 kilometers per hour (24-37 miles per hour) and gusts above 80 kilometers per hour are not uncommon in fire-prone areas, particularly in Victoria, New South Wales (NSW), South Australia, and Western Australia.

Some of the historical records indicate examples of fires with extreme winds:

• During the 2015 Pinery Bushfire (South Australia), which occurred under an issued extreme fire danger rating, sustained north-westerly winds of 50–60 kilometers per hour and gusts up to 90 kilometers per hour were reported.
• The Ash Wednesday Bushfires of February 16, 1983, in Victoria and South Australia occurred under gale-force northerly winds, with gusts reaching 100 kilometers per hour and relative humidity as low as 6%.
• Many other fire events across South Australia, as recorded in Country Fire Service histories, describe fast-moving fires under winds above 40 kilometers per hour, with gusts reaching 80 kilometers per hour or more.

In Australia’s landscape, these wind speeds are enough to transport ignition into highly populated corridors—such as the Blue Mountains to Greater Sydney, or outer Melbourne's northeast.

This, in turn, increases ember lofting and spotting distances, which become critical in the number of properties destroyed: it has been reported that up to 90% of house losses during bushfires are due to ember attack rather than direct flame contact.

 

3. Emergency suppression capacity under strain

The NSW Bushfire Inquiry found that during Black Summer Bushfires in 2019/2020, state firefighting resources were strained early in the season, and that remote ignitions were often deprioritized because aircraft were already stretched and committed to larger fires, limiting initial attack capability. 

As fire lines multiply and infrastructure burns, firefighting becomes reactive rather than preventive, with the prescribed advice being to evacuate and save as many lives as possible, rather than stay and fight the fire—a hallmark breakdown seen in UC events globally.

 

4. Built environment characteristics enable propagation

Australian housing stock contains many features that are vulnerable to ember attack and radiant heat:

• Timber fencing between properties
• Narrow side setbacks (less than two meters)
• Roof cavities and eaves with unsealed vents
• Flammable garden mulch and decking
• Close proximity of vegetation to structures

While the AS 3959 standard, introduced after the 2009 Black Saturday Bushfires, has improved resilience for new buildings, over 90% of existing homes in high-risk areas were built before these codes came into force.

These structures remain highly vulnerable to ember penetration via roof vents, decks, and flammable fences. Once ignition begins, density and continuity of structures are key drivers of spread.

This highlights the importance of accounting for fine-scale building features and fuel continuity in catastrophe modeling, as even compliant homes may be compromised by adjacent structures or minor ignition points.

 

Figure 1: Potential ignition points for a typical home during a UC event

 

Modeling UC risk in Australia

Insurers and reinsurers must recognize that UC is not a scaled-up bushfire. It is a distinct phenomenon that can be modeled, with a series of required antecedents before the bushfires, and a series of events that must occur for a fire to then develop into a catastrophic scenario. 

In catastrophe modeling terms, it represents a tail-risk event, where multiple variables produce order-of-magnitude loss escalation. The good news is that this type of phenomenon can be explicitly modeled to estimate its likelihood and intensity—offering a more accurate alternative than relying on broad scale-up factors or rules of thumb.

From a catastrophe modeling standpoint, representing UC requires the following:

• Stochastic fire weather simulation: including extreme winds, ember potential, and moisture deficits.
• Ignition probability modeling: for ember attack under urban conditions.
• Structure-to-structure propagation modules: using urban topology, setbacks, density, and materials.
• Suppression failure modeling: to simulate cascading loss scenarios.
• Probabilistic scenario generation: especially for portfolios with high urban exposure in peri-urban areas.

A review of how each of these components contributes to the risk has been developed, and how they are used in a bushfire risk assessment helps to quantify the impact of these types of events, should they occur, and to estimate the uncertainty associated with the estimates.

 

The takeaway

Australia has not yet experienced an urban fire event of the scale or systemic intensity seen in places in the U.S. like the Palisades Fire (Palisades, CA), Tubbs Fire (Santa Rosa, CA), or the towns of Superior and Louisville, CO (Marshall Fire), where structure-to-structure fire spread led to widespread losses.

But the ingredients for such an event do exist in several metropolitan-adjacent regions. Acknowledging this is not alarmist—it is a necessary step toward improving resilience.

Urban conflagration remains a blind spot in many catastrophe models, largely because it sits outside the bounds of recent Australian experience. As an industry, we must quantify these risks probabilistically—not just for what has occurred, but for what is physically plausible under cascading scenarios in today’s warming climate.

Speak with your Moody's customer representative to learn more about how we are addressing this blind spot in our upcoming Moody's RMS Australia Bushfire HD Model, or find out more about Moody's RMS bushfire and wildfire modeling here.