The level of destruction from the recent outbreak of wildfires in California continues to rise with more than 12,408 structures now claimed by the fires, according to the latest data from the California Department of Forestry and Fire Protection (Cal Fire).
Aftermath of the Camp Fire in Paradise, Butte County. Source: Josh Edelson/AFP
The majority of these damages were caused by the Camp Wildfire in Butte County, which destroyed 9,700 single residences, 118 multiple residences, 290 commercial properties and a further 1,750 minor structures after burning through the town of Paradise last Thursday.
These numbers have increased significantly over the last few days as authorities have only now begun to assess the true extent of the devastation after gaining access to areas affected by the blaze.
The impact on the insurance and reinsurance industries is also sure to be substantial, with losses likely to reach the upper band of the preliminary estimates released so far.
The Camp Wildfire has become the deadliest and most destructive wildfire in California’s history, with 63 deaths confirmed and more than 600 people still missing at present count.
It has burned through 141,000 acres and continues to threaten 15,500 structures despite containment now reaching 40%.
Further south, the Woolsey fire has destroyed 548 structures and damaged a further 157, many of which are in the affluent region of Malibu and include buildings and locations used in the film and television industries.
It has burned through 98,362 acres in the Ventura and Los Angeles Counties and is currently 62% contained, although it continues to threaten 57,000 structures, according to Cal Fire.
The Hill Fire, also in Ventura County, is now almost entirely contained after burning through 4,531 acres, destroying two structures and damaging two more.
The combined 12,408 properties destroyed by this recent outbreak is now a higher total than the collective destruction from the Tubbs, Nuns, Atlas and Thomas Wildfires from October and December 2017, which between them are estimated to have driven somewhere around $13 billion in insured losses.
That suggests the current industry loss estimates for this outbreak will prove to be too low, given the number of properties known to be destroyed was much higher.
Preliminary estimates from Credit Suisse put insured losses for the recent wildfires in the range of $5 billion to $10 billion, while Moody’s said $3 billion to $6 billion and Morgan Stanley put losses for the Camp Wildfire alone at between $2 billion and $4 billion.
Auto and vehicle losses from the wildfires also remain uncertain at present but are sure to drive further losses for the insurance and reinsurance industries.
All three recent wildfires sprang up last Thursday and spread rapidly due to adverse weather conditions. Current estimates from Cal Fire suggest that the Woolsey Fire will be fully contained by November 19, while the Camp Fire will not be fully contained until around November 30.
Although officials have not yet disclosed a cause for the Camp Wildfire, energy supplier Pacific Gas and Electric Company (PG&E) remains under scrutiny due to reports that its power lines in the area had experienced problems shortly before the fire ignited.
If it is determined that PG&E is responsible for igniting the Camp Fire, California law would require that the company assume financial responsibility for the damages caused, thereby alleviating losses for re/insurers.
However, the situation is complicated further by PG&E’s $200 million Cal Phoenix Re Ltd. (Series 2018-1) catastrophe bond, which provides third-party property liability insurance coverage for wildfire outbreaks in California.
Insurers and reinsurers will be watching the development of the wildfires closely over the coming days as the full extent of the damage emerges and as more catastrophe risk modelling firms begin to release loss estimates.
