Wildfire Outlook – What Lies Ahead in Late Summer?
In my last blog I pointed out that 2013 and 2014 had the fewest wildfires on record since 1994, despite record drought conditions in much of the U.S. We have not been so lucky thus far in 2015 as there have been 37,389 fires through August 7, which is a higher number than the 34,697 fires during the same time period last year. More noticeable, however, are the 6,074,389 acres that have burned this year compared with just 1,798,190 during this same time period last year.1 As we enter August, a month that typically features extreme heat and dryness, we are likely to see this wildfire activity increase.
The Western U.S., where long-term drought conditions are prevalent, has seen the most wildfire activity thus far in 2015. Roughly 75% of the land in the 11 western states is facing "Abnormally Dry" conditions or worse, and the exposed population is 58,736,446.2 Not surprisingly, the wildfire exposure in these areas continues to be of concern as “Dryer than normal fuels and little forecasted relief have led to above normal significant fire potential” for most of the Northwest, Alaska and Southern California through August.3
The Rocky Fire, which started on July 29 in Northern California, has burned 69,600 acres and destroyed 43 residences and 53 outbuildings.4 This is one of 19 wildfires currently burning in California as of August 7, spreading firefighting resources thin. Alaska, Oregon and Washington have seen similar scenarios, with multiple fires burning. The drought conditions in these states have created entire landscapes of dry and dead vegetation. This vegetation is significantly more likely to burn, and it often acts as a ladder fuel that provides a path for fires to climb up buildings, trees, bushes and spread over large geographic areas.
Weather, though, is just one of the variables we look at when we assess the wildfire exposure at a location. Some of the other variables we look at include - but are not limited to - fuel load, clearance, slope/aspect, construction and defensibility. Recognizing that these variables change over time, it is important to ensure that you have the most up-to-date information on each of the locations in your book of business in order to make informed underwriting decisions.
As a direct reinsurer, we share in the risk that we write with our clients, so don’t hesitate to call your Gen Re representative if you would like to get a second opinion about a risk’s wildfire exposure or if you want to discuss how facultative reinsurance can help transfer exposure.