Wildfire Outlook - What’s Ahead in 2016

May 02, 2016| By Chris Beston | Property | English

Region: North America

Wildfire season seems to come earlier and earlier each year in the U.S. Wildfire season today in the U.S. is on average 78 days longer than it was in the 1970s.1 As we look ahead to 2016, the industry is paying close attention. We are coming off a record breaking wildfire season in 2015 that saw 10,125,149 acres burn in the U.S., the highest number burned in a single year.2 To put it into perspective, that is more than the total number burned during 2013 and 2014 combined - over 7,915,159 acres,2 a larger land area than the states of Maryland, Delaware and the District of Columbia combined.3

Contributing to the uniqueness of 2016 weather in the U.S. is that we also just saw the first major El Niño condition since 1997-1998. This pattern, which has all but wound down, will have an uneven impact on the wildfire exposures in the U.S. during the spring and early summer months as different geographic areas saw varying amounts of rain and snow earlier in the year. Precipitation aside, temperatures during El Niño were above normal throughout the U.S., leading to quicker snowmelt in certain areas and the continuation of severe drought conditions in others. According to scientists from NOAA, “The average temperature for the contiguous U.S. during winter (December - February) was 4.6°F above the 20th century average, a new record.”4

As of April 15, 2016, 1,381,078 acres have already burned this year in the U.S., more than four times the number burned during this same period in 2015.2 This is highlighted by the Anderson Creek Fire, which burned almost 400,000 acres in Oklahoma and Kansas in late March. The concept of wildfires as a regional risk in the U.S. - affecting, for example, only California or the Southwest - is erroneous. As we saw during 2015, and will continue to see in the years ahead, most geographic areas in the U.S. face wildfire exposure.

The unpredictable nature of when or where a wildfire will occur is further complicated by the fact that many of the property underwriting variables associated with wildfire exposure change over time. Continually monitoring variables - such as fuel load, clearance, slope/aspect, construction, access and defensibility - will ensure we make the most informed underwriting decisions possible.

As a direct reinsurer, Gen Re shares in each risk that we write with our clients and has a vested interest in making sound underwriting decisions. Don’t hesitate to call your Gen Re representative if you would like to get a second opinion about wildfire exposure risk(s) or if you want to discuss the various facultative reinsurance options that can help transfer exposure.





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