Cal Phoenix Re Ltd

The recent California wildfire outbreak proved a very difficult catastrophe event to estimate losses to insurance and reinsurance linked assets, as the numbers of properties destroyed by the fire and so the estimated costs kept rising as authorities uncovered more of the damage.

The latest outbreak of California wildfires have now burned their way through more than 20,000 residential or commercial properties and minor structures and this is expected to result in economic losses of above $10 billion, if not much higher, according to broker Aon, with the majority expected to be insured.

The property loss from the Camp wildfire in California continues to increase as investigations within the almost contained blaze continue, with the total number of residential, commercial and minor structures destroyed by the Camp fire alone rising by another 1,273 or 7% to reach a total of 18,421.

While losses from the ongoing California wildfire outbreak are set to likely be the most significant from the peril ever faced by insurance and reinsurance markets, rating agency Fitch says they should still have been priced into policies.

The number of properties destroyed by the ongoing California wildfire outbreak has risen by another 8% since yesterday, with the total rising to 18,652 structures, across residential, commercial and other buildings types, largely driven by continued assessment of the Camp fire in Butte County.

The number of residential, commercial and other properties lost to the ongoing wildfire outbreak in California has risen by another 12% since yesterday, with the total number of structures reported as destroyed reaching 17,354, suggesting the industry loss for insurance, reinsurance and ILS market interests keeps rising.

The main mutual insurance-linked securities (ILS) and listed reinsurance linked investment fund strategies fell again on Friday as the threat of losses from ongoing California wildfires resulted in a decline in their share prices, while a stock-exchange listed strategy also declined through last week.

The Amundi Pioneer managed interval-style mutual insurance-linked securities (ILS) fund, the Pioneer ILS Interval Fund, is expected to face a “modest” impact from the ongoing California wildfire outbreak.

Catastrophe bond fund managers have been marking down their holdings in Pacific Gas & Electric Co’s (PG&E) $200m Cal Phoenix Re Ltd. (Series 2018-1) cat bond on the expectation that it could face a total loss of the utility is found liable for the Camp wildfire in California.

Catastrophe risk modelling specialist RMS has estimated that industry insured losses from the Camp and Woolsey wildfires in California could reach as much as $13 billion, which is aligned with the opinions of insurance, reinsurance and ILS market sources.