At the recent Milken Global Conference, rebuilding LA was top of mind. Partnership, system-level engagement, and local leadership were key themes. And the insurance sector has a critical opportunity to reframe its role in disaster preparedness and society at large.
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At the recent Milken Global Conference, rebuilding LA was top of mind. Partnership, system-level engagement, and local leadership were key themes. And the insurance sector has a critical opportunity to reframe its role in disaster preparedness and society at large.
By Francis Bouchard, The Epicenter Contributing Editor
Business, philanthropic, and government leaders gathered in Los Angeles in early May for their annual dose of big thinking and big talking. Familiar topics such as artificial intelligence, geopolitical tensions, and mental health were high on the agenda at the Milken Global Meeting. But there was also a new issue that featured prominently both on and off stage: how to rebuild Altadena and the Palisades, two neighborhoods located less than ten miles away, that experienced devastating fires in January 2025.
Francis Bouchard, contributing editor for The Epicenter, was on the ground at the Milken Global Conference and reports on key themes from the convening. A seasoned insurance public affairs professional, Francis highlights the insurance sector's opportunity to reframe its role in disaster preparedness, and the specific opportunity presented by the LA fires for insurers to redefine their role in society. In Los Angeles, the post-fires recovery effort has catalyzed a sense of shared responsibility and an openness to innovative approaches, including the Los Angeles Delta Fund, an innovative partnership to finance the "resilience delta," the financial gap between what standard insurance payouts will cover, and what’s required to rebuild to the highest level of wildfire resilience.
With the chances of federal disaster relief waning, local leaders in Los Angeles appear committed to step into the funding vacuum and rebuild 12,000 new homes as a community. Immediately following the LA fires, and likewise reflected during conversations at the Milken Global Meeting, the call for partnerships dominated the formal and informal discussions about resilience and recovery. Local partnerships sprung up within weeks of the fires to channel resources to those most in need. Local community and business leaders with the resources established new groups, filling important gaps focused on capacity building, roadmap setting, and technical assistance, to complement the traditional grant raising and direct funds distribution. And the early voices calling for building back resiliently had become a full choir singing from the same song sheet by the time of the Milken conference.
As one city official put it, an “unprecedented sense of partnership” has defined the immediate response phase. As proof, $650M of philanthropic funds were raised in the first few weeks following the fires to support with immediate response and recovery and also seed longer term infrastructure rebuilding efforts. However, that funding is still almost $40B short of what’s needed to rebuild.
Together, the funds raised and the accelerated and highly collaborative partnership efforts that have emerged in the aftermath of the fires, begin to form the outlines of what could become a truly resilient and equitable large-scale community restoration. The modern ideal.
Part of a truly resilient and equitable large-scale recovery will include enabling the insurance sector to insure these homes after the recovery. But what conditions have to change in order to enhance insurability? Would rebuilding to the higher IBHS wildfire prepared standards make a difference, or is California’s new building code sufficient? How do leaders enforce community forest management and fuel abatement standards? Are there alternative forms of capital like catastrophe bonds, insurance-linked securities, or blended capital stacks that could provide capacity to struggling insurers? Are we looking at a two-speed recovery: one for the rich and famous, and one for everyone else? These may be difficult questions to answer, but they must be answered as part of this recovery.
Another clear refrain in the aftermath of the fires has been the need to focus on system-level engagement. “We need to draw bigger circles around disasters,” one non-profit leader at the Milken Conference urged. For insurers, that means finding ways to enhance risk awareness in major land-use decisions, facilitate resilient infrastructure investments, and promote public health strategies. It also means developing the analytical capabilities to define what it takes to make a community insurable.
Another narrative that has emerged in the aftermath of the fires has been a reminder that all risks—and all losses—are local, and that recovery efforts should focus on local communities. Insurers should embrace this local focus since the factors that will determine insurability are inherently local. It’s mayors, city managers, finance directors and, increasingly, chief resilience officers that will need to make the tough decisions on how to finance critical resilience infrastructure. The purpose of the insurance-related discussions at Milken was to understand how to equip those key decision makers with the tools, knowledge, and resources they need to quickly advance a truly resilient recovery.
Partnerships, system-level engagement, and locally-anchored leadership are concepts that are certainly not new in the disaster recovery space. But with The U.S. Army Corps of Engineers and Federal Emergency Management Agency (FEMA) having completed their initial debris removal (in record time and in close collaboration with city officials, but not without environmental issues and concerns), this recovery will now be locally led as Federal government funding is still unclear.
For some communities, this lack of Federal funding and FEMA-driven recovery could be overwhelming. In Los Angeles, it appears to have catalyzed a sense of shared responsibility and an openness to innovative approaches.
One innovative approach that has galvanized significant momentum is the Los Angeles Delta Fund—designed to ensure widespread access to the financial resources needed to rebuild with resilience. The Delta Fund has emerged as a partnership between The Resiliency Company, Marsh McLennan, Momentus Securities, IBHS, and the Dept of Angels and will be launched with a design event in June supported by Morgan Stanley, Insurance for Good, and SidePorch, among others. The fund offers grants, subsidized loans, and market-rate financial instruments to cover the difference between what it will cost homeowners to rebuild to the standard building code level (the payout level at which insurers will pay) and what is required to build to the higher-cost IBHS Wildfire Prepared Home standard.
The Delta Fund’s immediate aim is to ensure that enough homeowners will choose the “resilience top up,” enabling a uniquely transparent and resilient rebuild–unlike most seen in American history. The “resilience delta” refers to the financial gap between what current financing will cover (since building above code is not typically covered by insurance) and what’s required to rebuild to the highest level of safety and resilience. The momentum behind this partnership has created space for more stakeholders to consider what building to a resilient standard really means–for their own homes, for local businesses, and for the role of local and state governments adapting the built environment to the forces of nature.
Insurers should embrace the Delta Fund concept–not only as a means to harden as many as 12,000 homes in an at-risk geography, but as a means to reframe the insurance sector’s role in disaster preparedness.
In their 2021 business strategy book “Framers,” the authors Kenneth Cukier, Viktor Mayer-Schönberger, and Francis de Véricourt make the case that human advancement–big and small–is marked by “episodes of unconventional thought.” Or, to flip the narrative, “uniformity of mental models is what crushes human progress.”
Today, the prevailing frame in the insurance sector is that its role in the climate crisis is to model and price, to the degree they’re allowed, the technical attributes of specific perils. This view is articulated in countless TCFD and NAIC disclosures and essentially defines insurers’ exposure to physical climate risks as a contractual matter that can be reassessed every 12 months. For each individual insurer viewing this solely through the prism of their own risk portfolios, this narrow view makes sense. But ultimately risk allocation is defined at the system-level. Context matters.
That’s why government, industry, and local leaders must come together to reframe the challenge as less to do with financing risk and more about reducing risk. It’s why insurers need to escalate their efforts to improve building codes, collaborate with developers, and influence land use planning decisions. And it’s why the insurance sector needs to have answers to what it will take to retain long-term sustainable insurance markets.
The post-fires Los Angeles rebuild presents the insurance industry with an opportunity to redefine and embrace its broader role in society by restructuring the very notion of property catastrophe markets. The insurance market could instill a science-based understanding of catastrophe exposures. It could embed system-level thinking as the foundation for meaningful resilience. It could reorient the private versus public sector roles in managing climate risks. It could capture the resilience dividend of new solutions ranging from restored wetlands to drone swarms. It could spur the creation of a rapid response national procurement strategy. And it could start it all at the local level, where the system begins and ends, allowing the sector to align risk signals from the beginning.
This sounds like a lot to internalize, but this is precisely the spirit that has characterized the post-fires discussions and was on display at the May 2025 Milken convening. At the Milken Conference, one corporate foundation head, referencing the commitment to partnerships, declared that “this is the most exciting time to live.” She may be right, but only if the professional risk community reframes its role. Are we technocrats aiming to send risk signals? Or are we risk management experts aiming to harden systems? The right answer is yes. The real answer depends on whether we can overcome the uniformity of our mental-models.
No single talking shop meeting will solve anything. But if local leaders can maintain the energy, focus and collaborative spirit on display at the 2025 Milken Global Meeting then we may see one of those “episodes of unconventional thought” that radically alters how the nation responds to the extreme weather coming our way.
Francis Bouchard is a seasoned insurance public affairs professional who has been a strong voice for industry climate action for over a decade. He currently serves on several resilience focused non-profit Boards and Advisory Councils, and has joined The Epicenter community as a contributing voice on insurance and resilience. Stay tuned for more insurance-anchored content to come.
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