Wildfires continue to rage through Northern California, threatening thousands of properties and structures, prompting evacuations and a State of Emergency in California.
In recent days, the California wildfire season has intensified, driven by severe thunderstorms and lightning, exacerbated by hot and dry weather.
After the active and costly wildfire seasons in both 2018 and 2019, insurers and reinsurers will be all too aware of the potential for significant industry losses from the most recent outbreaks.
According to the California fire authorities, tens of thousands of structures and properties, including high-value homes, are at risk from the fires.
Currently, the most threatening appears to be the LNU Lightning Complex collection of fires (started by lightning strikes) around Napa and Sonoma Valley, which was caused by lightning and which has so far burned through more than 124,000 acres, and is threatening a substantial 25,000 structures.
So far, this outbreak has already destroyed 105 structures and damaged a further 70, while 0% is contained.
The CZU August Lightning Complex fires, which are raging through various parts of San Mateo and Santa Cruz counties, were also caused by lightning and have so far burned through 25,000 acres. These wildfires threaten some 8,593 structures, of which 20 have been destroyed and none damaged. According to the California fire authorities, this wildfire is 0% contained.
The SCU Lightning Complex wildfires in the state are impacting multiple locations throughout Santa Clara County, Alameda County, Contra Costa County, San Joaquin County, and Stanislaus County. The cause of this outbreak is unknown and so far, 102,000 acres have been burned, while 3,798 structures are threatened, although so far none have been either damaged or destroyed.
The Lake Fire wildfires, near Lake Hughes has so far burned through 26,213 acres and is 36% contained. This outbreak threatens 1,329 structures, of which 12 have been destroyed and six damaged. Additionally, authorities note that 21 outbuildings have been destroyed while one person was injured.
The River Fire in Monterey County has burned through 15,050 acres and threatens 2,750 structures, of which six have been destroyed and two damaged. This wildfire has been 7% contained.
For the outbreaks noted above, more than 41,000 structures are threatened. However, these aren’t the only wildfire outbreaks in the state with the region battling around two dozen fires in various locations.
In a recent note regarding the wildfires, reinsurance broker Guy Carpenter says that currently, there are 68 large fire incidents that are being actively managed across the whole of the U.S., compared with just 12 a week ago.
So far, says Guy Carpenter, more than 500,000 acres have burned, and 15,000 wildland firefighters and support personnel are tackling the outbreaks.
Currently, it looks as though the impacts to insurers and reinsurers are relatively minor, especially when compared with the recent loss experience from the peril. That being said, many structures remain in the path of destruction and with hot weather and dry conditions set to continue, re/insurers will be keeping a close eye on developments as the US wildfire season continues.
Towards the end of last year and on the back of two heavy wildfire seasons in the U.S., market commentary suggested that heightened wildfire activity could be the new normal for insurers and reinsurers.
As shown by recent analysis, large wildfires similar to those seen in 2018 could now occur in any year, regardless of how wet the previous winter was.
