forest-1161868_1280
Source: Pixabay
29 November 2018Insurance

Camp, Woolsey fires insured losses at up to $15bn: Moody’s

Moody’s estimates total insured losses from the Camp and Woolsey wildfires in California for property and casualty (P&C) re/insurers at $10-$15 billion.

While insured losses will reduce fourth-quarter earnings for primary insurers and reinsurers, Moody’s expects that the losses will be manageable.

“The Camp and Woolsey wildfire losses could surpass the $12.3 billion of wildfire losses that P&C insurers and reinsurers reported for the October and December 2017 California wildfires,” said Jasper Cooper, a Moody’s vice president.

The Camp Fire in Northern California's Butte County was 100 percent contained on Nov. 25 while the Woolsey Fire in Southern California’s Ventura County was fully contained on Nov. 21, according to the California Department of Forestry and Fire Protection (Cal Fire).

The wildfires destroyed over 20,000 residential and commercial structures, and additionally damaged almost 1,000 structures.

Assuming CAL FIRE’s estimate of 18,793 structures destroyed by the Camp Fire and 1,500 structures destroyed by the Woolsey Fire and a statewide average wildfire loss value of $981,000 per structure, losses could be around $19.9 billion. However, the average claim size for the Camp Fire (the most destructive fire) will likely be lower than statewide averages because home values in the affected area are relatively low, while the average claim size for the Woolsey Fire will likely be significantly higher than the statewide average, Moody’s noted.

Following two years of record California wildfire losses, California homeowners and commercial property insurers will continue to reassess their wildfire-related exposures, pricing and reinsurance arrangements, the agency noted. Some may try to raise rates or reduce exposure, particularly in regions that insurers refer to as wildland-urban interface communities (WUIs), Moody’s explained. Insurers may also increase property inspections and decline to renew policies for homeowners who refuse to take steps to reduce wildfire exposure. If the Camp Fire was caused by a failure of electrical equipment owned by Pacific Gas & Electric Company (PG&E), insurers may pursue subrogation claims against the utility, the agency said.

Get all the latest re/insurance industry news with our daily newsletter -  sign up here.

More of today's news

Lemonade prepares Europe launch

'Catastrophic' bushfires, flash-floods hit Australia

Insurtech Element secures €23m new capital for international expansion

RKH hires Asia marine cargo, hull leader from JLT Re

AmTrust completes go-private deal

Don't miss our insurtech email newsletter - sign up today

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Insurance
7 December 2018   As the US wildfire costs exceed $10 billion in 2018 for the second year running, wildfires may no longer be a secondary peril, Steve Bowen, Impact Forecasting director and meteorologist at Aon, has suggested.
Insurance
6 December 2018   Industry insured losses from the Camp Fire in Northern California will be between $6 billion and $9 billion, according to estimates by catastrophe risk modelling firm AIR Worldwide.
Insurance
6 December 2018   Specialty insurer Beazley expects the cost of claims arising from the 2018 California wildfires to be around $40 million, net of reinsurance.