Swiss Re Insurance-Linked Fund Management

Xactanalysis Insights and PCS

California wildfires flare up again in critical fire weather conditions


Wildfires in California have once again flared up and begun to expand, as critical fire weather conditions set in over the weekend resulting in evacuation orders and warnings.

wildfire-image-firefightersThe 2020 wildfire season in California is now the largest on record, with 7,928 fire incidents having already burned some 3.63 million acres  in the state.

Wildfires across western U.S. states, including California, Oregon and Washington, are already estimated by Moody’s to have caused insurance and reinsurance market losses of between $5 billion and $8 billion.

Catastrophe risk modeller RMS put the cost to insurance and reinsurance interests at between $4 billion and $8 billion.

The fires, alongside rising losses from hurricanes striking the United States, as well as spring severe thunderstorms, convective weather and derecho conditions, are all putting pressure on insurance carriers and driving some losses into reinsurance and insurance-linked securities (ILS) capital providers.

Aggregate reinsurance contracts are a particular concern, with some aggregate catastrophe bonds also thought likely to come into investor focus as the year progresses.

New wildfires have sparked in the last two days of critical fire weather, with the Zogg fire in Shasta county and Glass fire in Napa two of concern.

But the strong winds and hot, dry weather has also caused the massive complex fires to begin spreading again, with the North Complex fire in Plumas and Butte counties, that was started by lightning in August, once again a particular concern.

In fact, because of the spread of the North Complex wildfires, the town of Paradise, which was partially destroyed by the Camp Wildfire in 2018, is once again under an evacuation warning.

Another fire, the Shady wildfire in Sonoma County, is spreading fast towards properties, with officials citing extreme rates of forward-spread.

In total, Cal Fire estimates that the 2020 wildfire season in California has already destroyed 7,630 structures and the ongoing critical fire weather situation looks set to add to this over the coming day.

Weather conditions are expected to ease by mid-week, but the resurgence of these wildfires and the current dangerous night-time situation in California is once again raising a significant concern for lives and property in the state.

Utility PG&E has once again shut off power to tens of thousands in fear of its equipment sparking blazes during the period of critical fire weather conditions.

The dangerous weather conditions also extend to Oregon state and other parts of the western U.S., but at this time it appears California is experiencing the most dangerous situation.

Register today for ILS NYC 2023, our next insurance-linked securities (ILS) market conference. Held in New York City, February 10th, 2023.

Artemis London 2022 - Insurance-linked securities conference in London

Get a ticket soon to ensure you can attend. Secure your place at the event here!

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.