California wildfire season could be extreme in 2021, warn experts

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Scientists, meteorologists and other experts with a view on wildfire related conditions in the state of California are warning of the potential for an extreme, potentially catastrophic 2021 wildfire season, as tinder dry conditions begin particularly early in the year.

Wildfire industry lossesThe last few years of California wildfires have shown the insurance, reinsurance and insurance-linked securities (ILS) market the significant potential this peril has to drive enormous financial impacts and losses through the tiers of the risk transfer market chain.

Last year, the estimated insurance and reinsurance market loss from wildfires across the western United States including California in 2020 were pegged at up to $13 billion by catastrophe risk modeller RMS.

In other recent and impactful wildfire seasons, blazes in California were thought to have driven as much as $15 billion of insurance and reinsurance market losses in 2017, while the 2018 wildfire season was even more severe, with insured losses of around $18 billion, according to reinsurance firm Munich Re.

As a result, there have been moves to shed exposure to California wildfire risk in some corners of the insurance, reinsurance and ILS market, while premium rates have risen significantly for primary property insurance in wildfire exposed areas, as well as for property catastrophe reinsurance and wildfire property liability covers.

All of which makes the outlook for the coming season one that re/insurers and ILS funds will find potentially alarming, as experts suggest conditions are looking ripe for more impactful burns and wildfire potential.

A research team from San Jose State University analyses moisture levels in plants that can become a significant fuel source for wildfires in California and they have found that so-called fuel moisture content (FMC) has fallen to new record lows, indicating particularly dry conditions and higher fire potential.

The implications of drier shrubs and more abundant dry fuel is a higher chance of earlier wildfire formation, according to the researchers.

The levels of moisture in plant life in California’s hills and mountains are typically at their highest around April time, but in 2021 this is far from the case.

Many parts of California continue to be very dry, following years where drought has been the dominant feature.

The majority of California remains in some kind of drought status and as we move through spring rapidly the chances of significant additional moisture falling are decreasing.

While 2020 was seen as an outlier, in terms of acres burned and those levels of ground burned may not be repeated, the 2021 California wildfire season is still seen to have extreme potential, due to the dry conditions recorded.

Parts of northern California are experiencing their driest conditions by this time of the year since the late 1970’s, which is raising concerns for wildfires around the border region with Oregon as well.

The peak for California wildfire season remains some months away, usually accepted as being July to November, but sometimes extending into December as well.

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