The number of residential and commercial structures destroyed by the ongoing outbreak of three California wildfire events has risen again, suggesting an increasing level of loss for the insurance and reinsurance industry.
The figures released by the California fire authorities reflect a wildfire situation that continues to cause property damage, as well as increases to the toll simply as authorities gain access to areas and are able to count the properties destroyed more accurately.
As of late yesterday, the Camp wildfire in northern California’s Butte County has now destroyed 8,756 residential properties, 260 commercial properties and a further 1,301 so-called minor structures.
In addition the Camp wildfire has damaged a further 115 residential properties and 48 commercial properties.
This wildfire is the most destructive on record in history to impact California and as the number of properties destroyed increases so too does the eventual bill for insurance and reinsurance interests.
The Woolsey fire in southern California’s Ventura County has now destroyed an estimated 504 structures, with another 96 damaged.
While the numbers are much lower, the average value of a property could be as much as four times higher in the Malibu and beachfront regions affected, hence this is expected to also be a costly insurance event.
The Hill wildfire still sits at 2 structures destroyed and a further 2 damaged.
So in total the last week’s wildfires in California have now destroyed at least 9,522 residential and commercial structures, as well as the 1,301 minor structures (a number of which will not be insured).
Last year’s Tubbs wildfire, which was the previous most damaging wildfire outbreak at 5,636 structures destroyed, is estimated to have caused somewhere around an $8 billion insurance and reinsurance market loss.
However, property values in that area are considered to be roughly three times higher than in the Butte County area of Paradise and its surroundings, that have been hit so hard by the Camp fire this year.
Conversely, the Woolsey fire burns in an area where property values could be even higher than where the Tubb’s fire struck.
Hence it is difficult to make industry loss estimates, but the ranges offered by third-party observers appear relatively accurate so far.
Analysts at Morgan Stanley had first offered an estimate, opting for $2 billion to $4 billion for the northern Camp wildfire alone, as reported by our sister publication at the time. That seems reasonable at the upper-end of the range, given the number of properties now reported as destroyed has risen significantly since Morgan Stanley made its estimate.
Moody’s had estimated an industry insured loss of between $3 billion and $6 billion for the three wildfires, which as we explained in this article we would see coming out towards the higher-end. A loss towards the higher-end of that range seems likely given the expanding number of properties reported as destroyed across the Camp and Woolsey wildfires.
Most recently, analysts at Credit Suisse said the wildfires could cost between $5 billion and $10 billion, which as we explained yesterday also seems reasonable once you take into consideration all of the other vectors of insurable loss (including automobiles, demand surge, business interruption and additional living-expense claims).
The number of structures destroyed by these wildfires is likely to rise further as the count continues and given the Camp fire is still only 35% contained, the Woolsey fire 52% contained, there is also potential for fresh damage and losses to occur.