Total insured losses from the Camp and Woolsey wildfires currently devastating large parts of California will be between $9bn and $13bn, risk modelling firm RMS has predicted.
The estimate, broken down into $7.5bn to $10bn for Camp and $1.5bn to $3bn for Woolsey, includes property and auto damage, burn and smoke damage, business interruption, additional living expenses and contents loss.
RMS added the prediction was based on its soon-to-be-released North America wildfire model that simulated the ignition, fire spread, ember accumulations and spoke dispersion of the blazes. Such findings, according to RMS, are supported by damage reports from firefighters and resident observations.
“Wildfire is now a major catastrophe risk that must be rigorously managed with the best data and model science,” said Mohsen Rahnama, chief risk modelling officer at RMS.
“With increasing exposure due to properties near wildland areas and ongoing climate variability, insurers, policymakers, and homeowners must adapt to the prospect of more frequent and severe wildfires.”
The Camp fire started near the Pulga area of northern California on 8 November and is now the most destructive in the state's history, killing 77 people and destroying over 150,000 acres of land so far.
Woolsey also began on 8 November in the Ventura County, southern California and has since killed three people and destroying almost 100,000 acres of land.
Speaking to InsuranceERM last week, RMS’ senior director of product management Chris Folkham warned extreme blazes could become the norm for California in the future.
Equity analysts at Alliance Bernstein said insured losses of $12.5bn from the fires, combined with those of this year’s hurricane Michael, wildfires are likely to push annual aggregate natcat losses “markedly above budget.”
The firm predicted Munich Re and Swiss Re would be most affected by the fire, incurring losses of $600m and $400m respectively. In terms of losses relative to market cap, Lancashire would be most affected.
An earlier estimate from Moody's predicted insured losses from both of the blazes would be between $3bn and $5bn. Data analytics provider CoreLogic also warned nearly 50,000 homes were at "high or extreme risk" and total reconstruction value of these homes could be $18bn.
People:Mohsen Rahnama