California Wildfires May Lead to $8B in Insured Losses: Aon Benfield

California’s historic wildfires may lead to as much as $8 billion in insured losses. That’s a record for insurers, according to the October 2017 Global Catastrophe Recap from Aon Benfield’s Impact Forecasting.

The surge in October wildfires killed at least 43 people in California and injured 185. Impact Forecasting cited data from CalFire showing that nearly 9,300 structures were damaged, of which 8,560 were destroyed.

Underscoring the seriousness of the wildfires and their aftermath, the California Department of Insurance cited at least 19,000 residential, commercial and auto claims already filed, where payouts surpassed $3.32 billion. Impact Forecasting said the insured loss/payout number could hit $8 billion, however, as insurers process additional claims.

On an aggregated basis, this is the costliest insured wildfire event ever recorded, Impact Forecasting said. Nearly 24 different fires aggregated together as “the most damaging event on record in the state,” according to the report. Napa, Sonoma, Mendocino, Lake, Solano, Butte, and Yuba Counties saw some of the worst damage.

As bad as the California fires were in October, a number of other weather events left substantial damage and insured losses, the report noted. Among them were:

• A wildfire broke out in Central and Northern Portugal, killing at least 45 people. Total insured losses will reach $232 million, according to data from the Portugese Association of Insurers. This could count as the costliest event for the local industry on record. More fires killed at least four people in Northern Spain.
• Windstorms hit Northern Germany and Western Poland, causing “moderate damage” and killing at least seven people. Hurricane Ophelia, the easternmost Atlantic major hurricane on record, also made its way to the British Isles (counted as “extratropical remnants”). Another windstorm caused at least 10 deaths in central Europe and “hundreds of millions in claims payouts,” according to the report.
• Super Typhoon Lan caused more than $1 billion in economic losses in Japan, and wreaked havoc on the Philippines with winds and heavy rains. Typhoon Khanun also struck southern China.
• Hurricane Nate struck Central America, killing at least 46 people and causing “extensive material losses.” The report noted it also left behind minor damage in the U.S. Gulf and Mid-Atlantic states.
• There was also widespread flooding in China, Thailand and Vietnam due to constant rain, and the storm killed at least 98 people. In Thailand, at least 121,000 homes were damaged by flooding.

Source: Aon Benfield/Impact Forecasting

This article first appeared in Insurance Journal’s sister publication, Carrier Management.