9 October 2015 Insurance

California wildfire insured losses surpass $1bn: Impact Forecasting

This year has been the costliest for insurers in terms of payouts for wildfire losses since 2007, according to a new report by Impact Forecasting, Aon Benfield’s catastrophe model development team.

The latest edition of the firm’s monthly global catastrophe recap report explained 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 preliminarily insured losses estimated at more than $925 million.

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

Adam Podlaha, head of Impact Forecasting, said: “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 billion in claims payouts for the Valley and Butte fires alone, it makes it the costliest year for the peril since 2007.

“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.”

Additionally, officials in Indonesia declared 2015 as the worst year for wildfires since 1997. This followed a reported $4 billion in direct and secondary economic losses from fires inSumatra and Kalimantan.

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