Aon’s annual Global Catastrophe Report has bad news for the industry. For the second year in a row claims payouts for wildfire losses will top $10 billion.
The worst wildfire was California’s Camp Fire. It destroyed most of the city of Paradise and killed 88 people. Dozens are still missing so the death toll is likely to rise even more.
According to the California Department of Forestry and Fire Protection (CalFire) 19,357 homes, businesses and other structures were destroyed in the fire. At the same time, another 2,000 structures were destroyed in the Woolsey Fire in Ventura and and Los Angeles counties.
Economic losses for both fires are staggering and have been predicted to be from $12 to $15 billion. Insurer losses will be way over $10 billion when you consider these are just two of the large fires experienced in the state in the last year.
And that’s just California. Other states have experienced huge losses from wildfires, too.
Steve Bowen, Impact Forecasting director and meteorologist said, “With annual wildfire industry payouts expected to exceed $10 billion for the second consecutive year in the United States, the standard assumption of wildfire being a secondary peril may evolve in the future,” he said. “While insurers remain firmly in position to handle the volume of claims in the aftermath of recent events, these heightened losses put a further spotlight on the growing risk of the peril around the world.”
Bowen added that wildfires keep hitting the same locations on a regular basis. He suggests it may be time to look at more ways to mitigate losses.
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