It's no secret that 2017 was a historically bad year for natural catastrophe events. Swiss Re's preliminary natural catastrophe and man-made disaster numbers estimated the insured losses from hurricanes Harvey, Irma, and Maria at $93BN and insured losses from all natural disasters in 2017 at $136BN. However, while many would say it was only a matter of time before we saw a major, or multiple major hurricanes, after several benign years of activity, a new peril surfaced that was not on many insurer's minds at the beginning of 2017: wildfires. Last year was the costliest year on record for wildfires, totaling $14BN (including $11BN from the October wildfires in CA and $2.2BN from the December events). Many experts believe factors such as climate change and conservative forest management are leading to larger and more deadly wildfires. So what caused this latest devastating wildfire season?
In addition to the insured economic damage the wildfires had in 2017, it's important to recognize the impact these fires had on a human level. Approximately 1.2 million acres of land were burned, almost 11,000 structures were destroyed and at least 46 people were killed. Repairing the damage done to these people's lives will take a very long time. So what caused it? In simple terms, the answer is the weather. A wet winter and spring allowed shrubs, trees, plants and various forms of undergrowth to flourish. In fact, the 2016-2017 water year set records in the northern Sierra Nevada, which recorded 94.7 inches of rain. This led to a larger amount of vegetation growth, especially in areas like Santa Rosa and Napa. This new brush is very flammable and is susceptible to creating embers that can travel a considerable distance, especially when factoring in high winds. Once spring turned to summer, we saw a new record broken: heat. The 2017 summer was the hottest ever recorded in California, which allowed all this new undergrowth to dry. The average temperature for the months of June to August was 73.7 degrees F, so the rainy winter/spring combined with the dry summer led to a perfect storm of weather conditions in the region. Combining that with the fact that winds in the fall are much more powerful from the Great Basin, you have fires spreading faster and much quicker once they do start.
Urbanization in these areas has also grown, which causes much more damage economically as there is more property in high risk wildfire areas. This development in these areas can cause a significant problem for firefighters and communities, as there remains an underappreciation for these communities exposure to wildfires. It's important that those who live in highly exposed areas protect themselves, such as constructing homes with fire-resistant materials, installing smoke alarms, and situating homes on lots to protect them from fire spread. Flammable undergrowth is also significant and homeowners should look to limit the amount of this undergrowth in their yards. However, a lot of these safeguards should be put into place before a home is built, so it's important that homeowners or communities looking to build in these areas factor some of these concerns before constructing their development.
The fact that these wildfires took place during a year when hurricanes were historically bad raises concerns about the effects of future natural disasters, as scientists fear climate change could make extreme weather events even more damaging. Many climate scientists claim that unusually warm waters may have been responsible for the extreme rainfall that took place during Hurricane Harvey, and these unusually warm waters are likely at least partially caused by human activity. A study published by Environmental Research Letters uses US Gulf Coast rainfall records going back to 1880 and found that rare, extreme rainfall events have gotten more intense and that climate change boosted Harvey's three-day rainfall by about 15%. Studies on the California wildfires are finding similar results. The summer and fall is when California is most vulnerable to wildfires, as hot temperatures dry out the vegetation, which provides fuel for wildfires in the summer, and hot winds blow in over the mountains from the desert in the fall. A study in 2015 found that over the last 50 years, fires in both seasons have become more frequent and severe. Additionally, the average temperature in California has risen roughly 1.5 degrees Celsius since 1895, and this is only going to get worse as the Arctic sea ice reduces. This makes the risk for more intense wildfires in California only that much bigger.
Last year was a bad year for the property insurance market. There is no secret about that. While the hurricane peril often grabs the headlines, wildfires tend to be a peril that most insurers don't dedicate a lot of resources to during their underwriting process. Going forward, that may be something that starts to change.
Category: Climate/natural disasters: Climate change, Disaster risk, Resilience, Other