Aon: California Wildfire Claims Reach $1B as Peak Season Begins

The U.S. economy has sustained $2 billion in wildfire losses – the highest in eight years, according to the latest edition of Impact Forecasting’s Global Catastrophe Recap monthly report.

The report, which evaluates the impact of the natural disaster events that occurred worldwide during September 2015, reveals that several wildfires impacted California during the month. The Valley Fire, which occurred northwest of San Francisco, was the third-most damaging wildfire in state history, killing four people and destroying 1,958 homes and other structures. Forecast economic losses from the fire were in excess of $1.5 billion, with preliminary insured losses estimated at more than $925 million.

Meanwhile, the Butte Fire, which occurred southeast of Sacramento and was the seventh-most damaging wildfire in state history, killed two people and caused total estimated economic losses of at $450 million, with insurance losses expected to be above $225 million.

With peak U.S. wildfire season in California having started in late September and lasting through early November, wildfires in 2015 have already caused more damage and financial loss in the U.S. than in any other year since 2007.

“The severity of the September wildfires in California serves as a reminder of how costly the peril can be for the insurance industry. With insurers facing more than $1.0 billion in claims payouts for the Valley and Butte fires alone, it makes it the costliest year for the peril since 2007,” said Adam Podlaha, head of Impact Forecasting. “The peak of the California wildfire season is just beginning, and Impact Forecasting remains well suited to help our clients assess their risks given our brushfire model for the region.”

Elsewhere in September:

• Officials in Indonesia declared 2015 as the worst year for wildfires since 1997, following a reported $4.0 billion in direct and secondary economic losses from fires in Sumatra and Kalimantan.
• A magnitude-8.3 earthquake impacted central Chile on September 16, triggering tsunami waves and killing 14 people. Over one million residents were evacuated as economic losses neared $1.0 billion.
• A magnitude-6.6 earthquake struck eastern Indonesia on September 25. Dozens of individuals were injured as nearly 2,500 homes and other structures were damaged or destroyed.
  Extensive flooding affected portions of Japan, killing eight people and damaging or destroying 20,000 homes. Three large insurers in Japan estimated payouts of at least JPY30 billion ($250 million).
• Damaging floods were reported in the U.S., India, Myanmar, China, Burkina Faso, Nigeria, Spain, and throughout Central America and the Caribbean.
• Typhoon Dujuan struck Taiwan and China, killing at least three people in Taiwan and injuring hundreds of others. Combined economic losses were listed at $680 million; insured losses were $79 million.
• Severe thunderstorms in Italy prompted economic losses of more than $2.2 million as widespread damages were reported to structures, vehicles, and crops.
  32 people were killed by lightning strikes in eastern India.
• Drought conditions intensified across western Canada, as annual insurance claims in Alberta alone were estimated at up to $675 million. Nationally, economic losses were estimated beyond $1.0 billion.
• A severe sandstorm killed 12 people as it swept through areas of the Middle East.

Source: Aon Benfield