Insurers on Wildfire Watch in 2015

April 29, 2015| By Chris Beston | Property | English

Region: U.S.

Wildfires will continue to be a burning issue in many parts of the U.S. in 2015 as wildfire season fast approaches. Despite record drought conditions during much of the past two years, 2013 and 2014 had the fewest numbers of fires on record since 1994. According to the National Interagency Fire Center, in 2014 there were 63,312 wildfires in the U.S., which burned about 3.6 million acres. This was on top of 2013 when we saw 47,579 fires and 4.3 million acres burned.¹Based on the cyclical nature of wildfires in the U.S., however, don’t expect these figures to continue to remain so low in the coming months and years ahead.

One reason is that traditional wildfire seasons throughout the U.S. have been getting longer due to warmer, drier prevailing weather conditions. The traditional wildfire season in much of the U.S. has been May through October. But with current weather conditions and other factors, traditional wildfire seasons are becoming broader. An example of this can already be found in the 2015 wildfire activity. As of February 27, 2015, over 91,581 acres have burned, which is a 34% increase over that same time period in 2014.This damage has also occurred in a diverse geographic area including but not limited to California, Oklahoma, Texas, Mississippi, Washington and Colorado.

And while weather conditions garner most of the headlines as it relates to wildfire, another major item to consider is the rapid growth of the Wildland-Urban Interface, which is the expansion of human development into unoccupied land. According to the National Park Service, as many as 90% of wildfires are caused by humans,² and as the Wildland-Urban Interface has grown, more humans are moving into or near land prone to wildfire. This growth has been drastic over the past few decades and the number and dollar value of exposed structures has also risen. According to Corelogic's 2015 Wildfire Hazard Risk Report, “More than 1.1 million homes in the U.S. with a total reconstruction value of more than $268 billion fall into the highest wildfire risk segment.”³

Fortunately, wider awareness of wildfires means the tools and resources available to us to assess these risks are improving all the time. These tools include (but are not limited to) wildfire models, wildfire scoring, satellite imagery and mapping and inspections. Some of the major variables we examine on locations with potential wildfire exposure are: fuel load, clearance, slope/aspect, wind/humidity and defensibility. As wildfire seasons expand, and as the Wildland-Urban Interface grows and dry weather conditions prevail, it is important to consider that a location’s exposure to wildfire also changes over time, making it imperative to continually monitor locations and your overall book of business. 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 facultative options for transferring exposure.

Sources:

1. National Interagency Fire Center

2. National Park Service

3. Corelogic 2015 Wildfire Hazard Risk Report

Tags: wildfire, fire risk, facultative, emerging exposures, North America