Reinsurance News

2017 California wildfire season could cost $180 billion: AccuWeather

12th December 2017 - Author: Luke Gallin

AccuWeather has warned that the 2017 California wildfire season could result in an economic cost of up to $180 billion, as the so-called Thomas wildfire adds to the expected $10 billion+ insured loss from the October California wildfires.

Photo: NBC news

Founder, President and Chairman of AccuWeather, Dr. Joel Myers, said; “Even before this spate of December fires, 2017 has already been recorded as the costliest and most destructive wildfire year in California history.”

Claims from the October California wildfires have now surpassed $9.4 billion, and initial estimates surrounding the recent December fires in the region suggest a re/insurance industry loss of around $2 billion. However, the wildfires have continued to burn and is proving challenging to contain, which suggests the final insurance and reinsurance industry loss could be significant.

“AccuWeather instead estimates the total cost of the California wildfires at about $180 billion after these current fires all burn out in approximately two weeks.

“These losses are attributable in part to homes damaged or lost, many of them in expensive neighborhoods; business and school closures; clogged commuter routes; respiratory illness from the bad air; costs to fight the fires and rehabilitation costs, lost sales and business activity and workdays lost.

“These major losses will be a blow to the insurance and reinsurance industry nationwide, which is still reeling from the economic toll of the hurricanes. Insurers will likely have no choice but to make up for the loss with higher premiums for all Americans over the next few years. Homeowners and renters have benefited from lower insurance costs over the past few years because of the lack of hurricanes and catastrophic events such as these fires. Furthermore, the impact of the 2017 fires will put a further strain on California’s budget,” said Dr. Myers.

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