California wildfires continue their destruction, but slightly better contained

Wildfires burning across the state of California continue to destroy land and property in the last 24 hours, but the containment of some of the most threatening blazes has increased a little for now after fire weather conditions proved not as impactful as expected yesterday.

Image: Noah Berger / AP.

Yesterday was a better day than expected for the fire fighters battling the blazes, as forecasts had suggested another day where new fires could be ignited by lightning and winds would fan the flames.

But actually the fires did not grow is quickly as expected, allowing them to become slightly better contained.

But at the same time the destruction of property continued and while for the insurance, reinsurance and insurance-linked securities (ILS) market damages are not yet at levels to particularly trouble the sector, they are increasing across the season.

It’s important to also remember how early in the season this wildfire activity is as well, meaning insurance, reinsurance and ILS markets will be anticipating another challenging year ahead, with the potential for severe wildfire losses.

Expansion of the most destructive LNU Lightning Complex wildfire, which is the third largest burn in California records after swapping second with the SCU fires, slowed yesterday, gaining just a few thousand more acres, but the destruction of property continued.

The LNU Lightning Complex wildfires, which is made up of fires including the Hennessey Fire, Aetna Fire, Walbridge Fire, Meyers Fire and Round Fire, has now burned through over 350,000 acres, but containment increased thanks to the better than expected weather conditions.

The LNU Lightning Complex fires, which are burning in Napa, Sonoma, Solano, Lake & Yolo Counties, is the third largest California wildfire on record.

Property damage has continued and the LNU Complex wildfires have now destroyed at least 908 structures (residential, commercial and farm buildings), with another 248 damaged and still 30,500 structures under threat.

The SCU Lightning Complex wildfires, which is now the second largest in California history having grown more than the LNU fires in the last day, have now burned over 360,000 acres, making this the third largest California wildfire on record.

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 15% contained, an increase of 5% in the last day.

Still, only 12 structures have been destroyed so far with this fire though, but also 12 minor structures have been added to the list and another 5 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, was expected to face some of the worst fire weather yesterday, but red flag warnings were pulled as storms with dry lightning moved away from the area.

The CZU Lightning Complex wildfires have now expanded to over 78,600 acres, are now a little more contained at 13%. More properties have been destroyed by the CZU fires in the last day, with now 208 residential properties, 6 commercial properties and 62 minor structures destroyed, 21 residential and 7 minor structures damaged, but still more than 24,000 additional structures under threat from this blaze.

Hundreds of other smaller wildfires continue to burn as well, some of which have destroyed additional properties and remain largely free from containment. For example, the Jones fire in Nevada has destroyed at least 21 structures, 14 being residential, the River fire in Monterey has destroyed 9, the Carmel fire in Monterey has destroyed 51, and the Lake fire in Los Angeles has destroyed 33 structures.

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 more than 3,000 structures, somewhere north of 1,600 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.

At this stage 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.

It’s important to note that this is still considered the early stages of the California wildfire season, with 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.