A new wildfire season looms on the horizon across the United States, and as the last two years of huge wildfire insured losses and extensive devastation to lives and property clearly illustrates, wildfire is no longer an easily manageable loss for the (re)insurance industry – but a new peak peril.
So, what could be in store for the 2019 season? The industry is reeling from back-to-back seasons with losses over US$10 billion. This is unprecedented even during a period when average losses between 2011-2018 were at US$3.7 billion. And looking back, this is up 40x compared to 1964-1990, where losses were below US$100 million in today’s prices. What is changing with this peril, what are the risk drivers that we need to look out for?
What will the 2019 wildfire season bring across the United States?
Across the United States, around eight and a half million acres burned in 2018, nearly three times the annual average during the 1980s and 1990s. That is the equivalent of the entire state of Maryland burning in one year. Last year’s Camp and Woolsey fires in California burned a total of 245,000 acres – these two fires alone burnt a combined area around three times the size of Detroit, destroyed more than 12,000 structures and killed 80 people.
It is getting hard to argue that the size and ferocity of the most recent wildfires across the U.S. are just anomalies, the evidence just does not support these events as being exceptional anymore.
As California’s then Governor Jerry Brown stated at a press conference as the Camp and Woolsey fires raged, these wildfire events are “… the new abnormal …” and that events may worsen over the next few decades. He added that “… the best science is telling us that dryness, warmth, drought, all those things, they’re going to intensify.”
Describing the scale and savagery of the wildfires currently burning in California is difficult to do, but a simple recounting of the statistics is a good starting point. They are thus:
At the time of writing, fifteen wildfires are now burning more than 280,000 acres (~113,000 hectares) in California. Collectively, they have laid waste to almost 7,000 homes and businesses. 31 people have died in the fires. 300,000 more were evacuated. 12,000 firefighters are working the front lines, making admirable progress at containment.
The biggest of these events, the Camp Fire (named for the road of its point of origin) is the most destructive wildfire in history, with 6,700 structures burned. During a period of particularly intense wind, it spread at a rate of more than one football field per second. Entire towns in its path are effectively destroyed.
Memories of last year’s Wine Country fires in Northern California and the Thomas Fire in Southern California are top of mind as we look at the unfolding wildfire events across the state, especially the notable Carr Fire to the northwest of the city of Redding in Shasta County, with a population of around 92,000.
Initial observations show similarities to the Wine Country fires in terms of its speed and ferocity, as the Carr Fire spread rapidly overnight on Saturday, July 28, nearly doubling in size. As of 02:00 UTC on Thursday, August 2, the fire is reported to have burned about 121,000 acres (~49,000 hectares) — see figure one below, destroying 1,546 structures, damaging an additional 255 structures, and forcing the evacuation of 38,000 people, according to CAL FIRE and local officials.
Satellite image taken on December 5, based on observations of visible, shortwave infrared, and near infrared light. Image Credit: NASA
Wildfires are once again raging across California, this time focused in the southern part of the state. Prior to the ignitions, weather forecasts called for a significant Santa Ana wind event from Monday (December 4) through Thursday evening (December 7), driven by a high-pressure system across the western United States. The NOAA Storm Prediction Center noted in their Day 1 Fire Weather Outlookvalid for Monday, December 4, that, “A very strong surface pressure gradient… coupled with strong low-level northeasterly flow will easily support sustained offshore winds of 30-40 miles per hour (48-64 kilometers per hour) across parts of Ventura into Los Angeles counties beginning later this evening and continuing through early Tuesday morning. Wind gusts of 60-80 mph (96-128 km/h) will be possible across the mountains/foothills of these counties where channeling and terrain effects can locally enhance the already strong flow, with gusts of 45-60 mph (72-96 km/h) likely at lower elevations.”