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Wildfires in Northern and Southern California continue to blaze as firefighters struggle to bring them under control, while early indications suggest possible lower total losses compared with the state’s 2017 fires.
The Camp Fire in Butte County, California, has burned 113,000 acres and is 25% contained according to the latest information from the California Department of Forestry and Fire Protection. It has destroyed 6,453 residences and 260 commercial structures and threatens another 15,500 structures, CalFire said.
The Woolsey Fire in Los Angeles and Ventura counties has burned 91,572 acres and is 20% contained, Cal Fire said on its website. It has destroyed 370 structure but threatens another 57,000, according to the state agency.
Combined, 31 people have died and hundreds remain missing, according to news reports.
“Although we think it's still too early for credible total insured loss estimates, the current fires’ losses are probably below the total losses caused by multiple October 2017 Northern California wildfires that collectively burned over 245,000 acres of land and destroyed more than 8,900 structures,” Meyer Shields, managing director at Keefe Bruyette & Woods Inc. in Baltimore, said in a Monday note.
“At this (still very preliminary) point, we assume that primary insurers rather than reinsurers will bear the majority of losses incurred, although we expect reinsurers to have some exposure (including aggregate covers reflecting YTD catastrophe losses),” Mr. Shields added.
Data from the firm’s report shows State Farm with the greatest exposure in the state to fire as measured by net written premium.
State Farm shows 11.7% of reported net written premium in the state represented by fire and allied lines; personal and commercial auto physical damage; commercial multiple peril, nonliability; farmowners; homeowners; and inland marine, multiple peril and private crop. Farmers Insurance Group of Cos. follows at 11.5%, with Liberty Mutual Insurance Co. a distant third at 6.2%.
Reinsurance should help temper losses at primary insurers including American International Group Inc., which “could have significant exposure to affluent areas like Malibu which is in the way of the Woolsey Fire, within its high net worth homeowners’ books,” KBW said.
Data and analytics provider Air Worldwide also said “the fires are still in the early days,” and would share additional information when available.
Catastrophe modeler Risk Management Solutions Inc. noted the “unprecedented, quick spread of the Camp Fire and Woolsey Fire … Wildfire risk will remain high, and exposure in high risk areas will continue to grow.”
The Carr wildfire in California has likely caused an estimated $1.5 billion in insured losses to date, foreshadowing another major wildfire loss event for insurers in the state, according to a report by Moody’s Investors Service Inc.