Wednesday, October 28, 2015

"U.S. wildfire insured losses could exceed $1.75bn..."

As we mentioned in July 15's "Risk: Tornado Count Remains Below Average, Wildfire Burned Acreage Jumps" this years fires in Alaska, totaling over 5 million acres, muddy the picture of the activity in the lower 48 states which was also up but not nearly as dramatically.

From Artemis:
Global reinsurance broker Guy Carpenter has estimated that, based on preliminary data, insurance industry losses from U.S. wildfire activity in 2015 are likely to reach and may even exceed $1.75 billion. 
Wildfire image from“Wildfire is a significant peril impacting insurers in the United States each year. Preliminary data indicates that 2015 insured losses from wildfires may approach or exceed USD 1.75 billion,” commented Tim Gardner, CEO of U.S. Operations at Guy Carpenter. 
The 2015 U.S. wildfire season has seen a number of large fires, particularly in California, where insurance industry losses were said to have hit $1.15 billion in September, with an economic loss of $2 billion. 
Guy Carpenter explains: 
The wildfire threat in the summer of 2015 was amplified by a strong ridge of high pressure that created very hot and dry conditions in the western U.S. More than 9.27 million acres were burned by wildfires through October 8, as compared to the 10-year average of around 6.3 million, according to data from the National Interagency Fire Center. 
“Wildfires are a complex peril due to a number of varying prediction factors such as temperature, rainfall deficit and wind conditions,” said James Waller, PhD, Research Meteorologist for Guy Carpenter. “As winter approaches, a strong El Niño should bring much needed rainfall to most of California and the Southwest, However, the Northwest will likely continue to experience dry conditions through the winter.” 
At this stage of the year we are really only just entering the peak of the U.S. wildfire season, meaning that further losses are likely and the insurance, reinsurance and perhaps insurance-linked securities (ILS) exposure could rise further....MORE
And the year-to-date (actually to Oct. 23) statistics from the NIFC:

Year-to-date statistics
2015 (1/1/15 - 10/23/15) Fires: 52,785 Acres: 9,391,601
2014 (1/1/14 - 10/23/14) Fires: 42,639 Acres: 3,256,120
2013 (1/1/13 - 10/23/13) Fires: 40,566 Acres: 4,154,680
2012 (1/1/12 - 10/23/12) Fires: 50,785 Acres: 8,912,187
2011 (1/1/11 - 10/23/11) Fires: 64,187 Acres: 8,222,531
2010 (1/1/10 - 10/23/10) Fires: 62,555 Acres: 3,064,433
2009 (1/1/09 - 10/23/09) Fires: 73,124 Acres: 5,713,002
2008 (1/1/08 - 10/23/08) Fires: 71,767 Acres: 5,006,786
2007 (1/1/07 - 10/23/07) Fires: 76,415 Acres: 8,283,285
2006 (1/1/06 - 10/23/06) Fires: 86,158 Acres: 9,394,639
2005 (1/1/05 - 10/23/05) Fires: 56,092 Acres: 8,245,350

Annual average prior 10 years
2005-2014 Fires: 62,357 Acres: 6,425,606



Wildfires: After Three Years Of Steady Declines The Current Season Will Rank As One Of The Worst On Record

We looked at this year's fire season a couple times, links below.
Up until the last couple weeks the big news had been the 5.1 million acres burned in Alaska this spring and early summer, far and away the most acreage affected up there in recent decades since the 2004 record, 6.6 million acres.

Since July the situation has changed with 2 million acres burned in the lower 48 states but no fires currently burning in Alaska.
To put that in perspective, here's the intro to our March look at the fire season:

The incidence and size of U.S. wildfires has fallen dramatically over the last three years, facts I've not seen rigorously examined either by academics or journalists. Considering the encroachment of the human population on what had been wilderness and the ridiculous resistance to prophylactic burns this table is quite amazing...

...Further, even the 2006 and 2010 seasons pale compared to the bad years.
The 1910 fire season resulted in 1736 fires in Idaho and western Montana alone which burned more than 3 million acres. Nationwide, over 5 million acres burned.

A single fire, Wisconsin's Great Peshtigo Fire of 1871 burned 1.5 million acres and killed between 1200 and 2500 people.
Because it started on the same night as the Great Chicago Fire, which killed 250, it was relegated to the history books....
September 2014

March 2015 
Risk: "Why forest managers want to set fires but can’t"