U.S. Wildfire Risk Continues to Rise
October 03, 2016| By Martha Flanagan |
Region: North America
Wildfire risk in North America is on the rise, primarily driven by a combination of warmer, drier conditions and the significant human expansion along the wildland-urban interface.
Record high temperatures and drought over the past decade throughout many regions in North America have led to ideal conditions for wildfires to ignite and spread. Last year was the warmest year on record (since 1880) and the 16 warmest years during this same time period have all occurred since 1998. These conditions have also led to the increase in the duration of the “traditional” wildfire season.
In addition, more people and businesses than ever before are located along the wildland-urban interface. This means that more and more insurable values are exposed to wildfire, often in remote locations lacking the infrastructure to combat it effectively. Complicating this is the fact the almost 90% of wildfires are caused by humans.
While there may not be much insurers can do to prevent the next significant wildfire event, improving our understanding of wildfires and using all available resources/tools can lead to better underwriting decisions and capacity allocation.
Chris Beston, who heads up our Wildfire team at Gen Re, consults frequently with our clients on underwriting this exposure, acting as a second head on a complex risk or discussing facultative reinsurance options to help transfer the wildfire exposure. He recently spoke with Reactions magazine for an article on current trends in wildfire exposure and underwriting in North America.
For more on this topic, read other Wildfire blogs by Chris Beston: