The Shifting Landscape of Filmmaking
As climate-related risks grow increasingly unpredictable, the film industry faces significant challenges in deciding where and how to produce its next big hit. From wildfires in California to hurricanes in Florida, amplified natural catastrophe risks are forcing production firms to rethink their approach to location filming. At the heart of this is a delicate balancing act: managing catastrophe exposure while maximizing the financial benefits of film tax credit incentives.
“Catastrophic risk is being discussed across the country,” said Peter Burt, president of entertainment at Intact Insurance Specialty Solutions. “For example, Miami has strong film tax incentives, but it’s historically a tough area due to hurricanes. Underwriters have to ask: Is it the right time of year? What’s the contingency plan?” Burt explained that film productions have traditionally gravitated toward iconic filming destinations like Los Angeles or the scenic coasts of Florida. However, as climate patterns shift and the frequency of disasters increases, these areas are becoming riskier propositions.
Location Selection and Risk Mitigation
In the film industry, tax credits are financial incentives offered by governments to attract film, television, and commercial productions to their jurisdictions. These incentives reduce the overall cost of production and can make a location significantly more financially appealing to producers. States like New Mexico, Georgia, and New Jersey, which offer hefty tax credits and a comparatively lower catastrophe profile, have seen a rise in production activity.
On the other hand, California, the film industry’s historic hub, has been losing productions due to a combination of rising wildfire risk and less competitive tax incentives. “California has had fewer film tax credits compared to other states and countries, which has made it a less attractive place to shoot,” Burt noted. The Los Angeles wildfires in January had a minimal impact on productions because they occurred during a low-filming period, but the event has prompted carriers to raise their scrutiny on risk mitigation strategies and contingency plans by productions.
The Insurance Industry’s Growing Influence
Insurance carriers, particularly those specializing in entertainment, are now playing a central role in how and where productions are greenlit. Underwriters are closely evaluating filming locations, accounting for seasonal disaster risks and historical exposure patterns. While this doesn’t mean film and media companies are ruling out catastrophe-prone areas, it does mean they are becoming more proactive in safety planning, especially when shooting in high-risk areas.
When productions insist on filming in high-risk zones, carriers are responding with adapted underwriting strategies. These include higher deductibles, specific sub-limits for catastrophe exposures, and more rigorous contingency planning requirements. Carriers are also avoiding peak disaster seasons when insuring time-sensitive shoots in vulnerable areas.
The Role of Technology in Mitigating Risks
To reduce dependency on volatile outdoor environments, productions are increasingly turning to technology. One key trend is the growing use of sound stages and controlled indoor environments. With CGI and other tech, productions can now make a set look like it’s in Cabo or Paris, even if it’s just a stage in Los Angeles. This makes for a safer, more controllable environment.
Beyond CGI, artificial intelligence (AI) and digital production tools are enabling teams to simulate complex environments without ever stepping foot outdoors. This not only minimizes exposure to weather-related risks but also helps streamline production costs. AI is also being explored for post-production editing, scene reconstruction, and crowd generation, making filming faster and less dependent on large-scale physical setups.
As the film industry continues to navigate the challenges posed by climate change, insurance, and tax credits, it’s clear that adaptability and innovation will be key to success. By leveraging technology, reassessing location choices, and working closely with insurance carriers, productions can mitigate risks while maximizing financial benefits.
