California wildfires have continued to burn their way through more acres and properties, with the largest Kincade fire still the most dangerous and an “extreme fire weather threat” forecast for the coming days.
As we explained yesterday, analysis from Enki Research suggests that $25 billion of property in California has been in immediate danger of burning from the outbreak of fires over the last week or so.
High Diablo and Santa Ana winds caused by a weather system, as well as low humidity and tinder dry ground, have resulted in an extreme fire weather forecast suggesting the highest levels of threat.
There are actually around 18 wildfires burning in California currently, although three have most of the focus for the insurance, reinsurance and insurance-linked securities (ILS) industry given the size and location of the Kincade, Getty and Tick wildfires.
Wind gusts of up to hurricane strength have made fighting the fires extraordinarily difficult and resulted in their spread, with the Kincade fire in particular becoming a significant blaze and threatening tens of thousands of properties as a result.
While their may be billions of property values considered at high-risk of these wildfires, being in close proximity to them, the amount actually within the fire perimeter zones is much lower.
Corelogic’s analysis estimates that the Tick fire has 601 single family homes within the perimeter at a reconstruction cost value of $248 million, the Getty fire has 162 single family homes at an RCV of $137 million and the largest Kincade fire only has 221 single family homes at an RCV of $150 million.
That shows that the larger fire in Kincade remains largely outside of the main residential areas, however with cities like Santa Rosa in its path there is a risk of the number of properties within the burn perimeter rising.
As of the latest update, the Kincade wildfire had spread to 76,138 acres, was 15% contained and had destroyed 189 structures (86 residential, 7 commercial), with another 39 damaged. Over 90,000 properties remain under threat of this fire and the weather today and tomorrow could be critical.
Further details on the report from utility Pacific Gas & Electric (PG&E) that a fault occurred on one of its transmission towers close to where officials say the Kincade Fire started, near the town of Geyserville, are still being investigated it seems.
PG&E is already facing numerous issues, bankruptcy and enormous claims from previous fires among them. The insurance and reinsurance industry has now paid out billions in response to wildfires that have been deemed caused by PG&E’s equipment, leading to subrogation claims and other issues.
The Getty wildfire meanwhile had spread to almost 700 acres and destroyed some 12 homes, damaging 5 more, in the high-value Los Angeles hills where it broke out.
There are reports that the Getty fire ignited after a branch touched power lines in the area, which is now under investigation as well.
The Tick wildfire, in Canyon County, is much more under control now, at 90% contained, after destroying some 30 properties and damaging 44 more.
Fire weather is expected to be extreme over the next two days, with a warning in place until late Thursday and the NWS saying to expect “damaging wind gusts between 50 and 70 mph,” with isolated wind gusts that could hit 80 mph and persistent low humidity.
“This all adds up to an extreme fire weather threat,” the NWS explained, “Meaning that conditions are as dangerous for fire growth and behavior as we have seen in recent memory.”
The insurance, reinsurance and insurance-linked securities (ILS) markets will continue watching these fire weather developments closely, particularly those that have picked up additional property and liability premiums in the state after rates rose significantly following the high market losses from 2017 and 2018’s fires.
Strong Santa Ana winds in the southern California area are expected to be particularly challenging for fire fighters and there is a significant risk of new fire outbreaks as well.
Insurance, reinsurance and ILS interests continue to watch this California wildfire activity closely, as no matter how much rates rose by at renewals this year they are unlikely to come close to covering loss costs should a repeat of recent years wildfire damage occur in 2019.
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