The ongoing spate of California wildfires continues to burn, with more properties destroyed in the last day and an estimate from Moody’s Investors Service suggesting insurance and perhaps reinsurance market losses are already at over $1.5 billion.
Moody’s based its estimate on the fact more than 1,800 residential or commercial properties have been destroyed by wildfires that have now burned over 1.6 million acres so far this season.
The actual figure for structures burned is now higher and some of our sources point to over 2,000 potentially insurable properties having been destroyed so far, with more than 1,400 structures destroyed since August 15th.
Moody’s cites an average value for these residential and commercial properties of $826,000, which gets it to roughly $1.5 billion in reconstruction value for insurance purposes.
At that level the impacts to reinsurance capital would not be expected to be particularly significant, but this continued destruction of property has now put the most damaging of the ongoing wildfires into the top-ten most destructive in California history.
The LNU Lightning Complex wildfire, remains the third largest burn in California records at around 361,000 acres and is now 33% contained
Fire fighters have continued to make progress in containing blazes in the last 24 hours, as weather conditions remained more conducive.
But LNU Lightning Complex wildfires, which is made up of fires including the Hennessey Fire, Aetna Fire, Walbridge Fire, Meyers Fire and Round Fire, has continued to burn properties and is now in the top-ten most destructive in California’s records.
The LNU Lightning Complex fires, which are burning in Napa, Sonoma, Solano, Lake & Yolo Counties, has now destroyed at least 1,080 structures, up another 102 on yesterday, (residential, commercial and farm buildings), with another 272 damaged and still 30,500 structures under threat.
The SCU Lightning Complex wildfires remains the second largest in California history at over 367,000 acres.
The SCU Complex fire is made up of numerous smaller lightning ignited blazes across Santa Clara, Alameda, Contra Costa, San Joaquin and Stanislaus Counties. It is now 30% contained, an increase of 10% in the last day.
20 structures have now been destroyed so far (up 2 on the prior day), but 17 minor structures have also been destroyed and another 6 are damaged. More than 20,000 structures remain under threat of this SCU set of fires.
The CZU Lightning Complex wildfires, burning across San Mateo and Santa Cruz counties, has again destroyed more property in the last 24 hours. Burning in a high-value area, this fire may actually be contributing a significant proportion of insured losses so far.
The CZU Lightning Complex wildfires have now burned more than 81,000 acres and are now 21% contained, a slight improvement on yesterday.
The CZU wildfires have now destroyed 590 structures (up around 150 in a day), over 408 of which are residential properties, 1 a multi-residential property, 49 non-residential commercial and 132 minor structures destroyed, while another 61 structures have been damaged and still over 24,000 additional structures under threat from this blaze.
Hundreds of other wildfires continue to burn in the state and are impacting a wide area, with some additional property damage seen. But these three blazes remain the major threat and source of property damage of concern to the insurance and reinsurance market at this time.
Wildfires in 2020, even at this early stage of the California season, have already burned more acres than the whole of the 2019 season.
The 2020 California wildfire season has now burned more than 1.5 million acres and destroyed well over 3,000 structures, somewhere north of 2,000 of which are thought to be insurable, to-date.
As a result, the costs to insurance and reinsurance market interests are growing, with the continuing potential for the wildfires to spread further into towns and cities a real concern, financially and in terms of the potential for much greater loss of life.
Perhaps more incredible, so far this season there have been around double the long-term average in number of wildfires, with more than 6,500 fires reported by Cal Fire and the U.S. Forest Service so far. The five-year average for this point in the season is closer to 3,800 fires.
Given the still early stage of the California wildfire season, the chances of a reinsurance market hit and so the potential for some losses to fall to the ILS market, is increasing steadily as the number of properties damaged and destroyed increases.
In recent severe wildfire seasons some of the most impactful fires were seen in October and November, meaning there is much longer to go for the overall impacts to worsen as the season progresses.
Recall, in recent severe and costly wildfire seasons for the reinsurance industry, some of the most impactful and expensive blazes have been much later in the year.