The amount of property, residential and commercial structures lost in the Camp and Woolsey wildfires in California has risen significantly again since last week, with the number of structures destroyed now almost 15,500 and the loss for insurance, reinsurance and ILS market interests seen even higher.
As of Friday 16th November the total number of structures destroyed by fires stood at roughly 12,400 structures, but the ongoing fire authority investigations in particular of the Camp Fire in northern California’s Butte County and Woolsey fire in southern Ventura County, has driven the number of properties lost much higher again.
As of the latest updates yesterday the number of structures destroyed across the ongoing California wildfire activity had reached 15,489 structures, with a near tripling for the Woolsey fire in expensive Malibu and Ventura perhaps a real concern, in terms of driving the eventual insurance and reinsurance market loss higher.
The Camp wildfire in northern Butte County continues to reveal a terribly toll, with the number of missing now cited as more than 1,000 people and already 77 confirmed fatalities.
In terms of property damage as of the latest figures, the Camp wildfire has now seen 10,364 single residential properties destroyed with another 338 damaged, 259 multiple residences destroyed, 418 commercial properties destroyed and 81 damaged, as well as 2,992 other minor structures destroyed, taking the total number of properties destroyed to 14,033, up from the 11,858 we reported on Friday.
The Woolsey fire, which burns in southern California’s Ventura County in the area around Malibu where property prices are much higher, has now destroyed 1,452 structures, up from 546 on Friday, with another 337 now reported as damaged.
The Hill fire, also in Ventura, has still only destroyed 4 fires and damaged another 2.
It’s clear that the insurance and reinsurance loss tally has risen significantly again and may continue to, especially as the Camp wildfire is still only 65% contained and has now burned 150,000 acres.
However, most of the addition is just due to more accurate counting, as authorities comb the ashes for signs of the missing and gain a clearer picture of the property impacts at the same time.
Industry loss estimates had suggested $5 billion to $10 billion of insured impacts, but it now seems likely that this will be eclipsed and the sector is looking at a $10 billion plus market loss event from these wildfires.
The near 15,500 structures destroyed is significantly higher than the collective property damage caused by the Tubbs, Nuns, Atlas and Thomas wildfires in October and December 2017, which between them were estimated to have driven an estimated $13 billion insurance and reinsurance market loss.
Despite the average property values being lower in the area of the Camp wildfire, it now seems these outbreaks will drive double-digit billions of loss to the industry.
Factor in the other vectors of insurable wildfire loss, so damage to automobiles, the resulting demand surge, evident business interruption, content claims and additional living-expense claims for those who have lost their homes, and it’s clear the total will be much higher than the early estimates.
The market now awaits a $10 billion to $15 billion loss from these wildfires, with the added uncertainty of the PG&E Cal Phoenix Re catastrophe bond which is now considered likely to be a total loss by the market, as we revealed first last week.
The Cal Phoenix Re catastrophe bond is part of a $1.4 billion layer of insurance and reinsurance that electrical utility PG&E has in-force for its property liability damage cover and the company expects that this will be wiped out, if indeed it is found liable for the igniting of the Camp wildfire.
As market loss expectations move north of $10 billion, there is an increasing threat to retrocession markets, industry loss warranties (ILW’s) and other ILS structures.
There is a good chance the number of properties destroyed rises even further and Corelogic said at the end of last week that around another 23,000 homes worth $8.6 billion were within the fire perimeters, suggesting that if the winds picked up and fire weather was conducive further destruction is possible.