US: 30% rise in frequency of large wildfires since the 2000s
Source: Middle East Insurance Review | Sep 2021
The average number of major US wildfires (over 40,000 acres) per year has risen 30% over the last 15 years from an average of 32.4 a year to 41 a year now, according to a study by Chaucer.
Between 2006-2010, there were 157 fires over 40,000 acres. Between 2011-2015 this rose to 173. There were 205 wildfires over 40,000 acres between 2016-2020.
Besides increasing in frequency, wildfires are causing more financial losses and are posing a bigger risk to property as people extend buildings into the Wildland Urban Interface, areas that were previously wilderness but have since been built upon and the land developed for human activity.
Chaucer said the risk of wildfire damage is increasing in part due to higher temperatures and shifting rainfall patterns. This has caused more drought conditions, linked to the effects of climate change. Drier spring and autumn seasons may have extended the duration of the wildfire season. Forest density has increased, providing more fuel for the fires.
The increased risks posed by wildfires, in addition to the rising value of claims, has put upward pressure on insurance premiums. With 38 US states at risk of wildfires, this year is expected to be one of the most destructive on record.
As the shift of wildfires from being a secondary risk to being an area of primary focus is relatively recent, the science and modelling of this risk is less mature when compared to other perils such as hurricanes. The methodologies and the assumptions used to forecast the probabilities and severities of wildfires still vary substantially – leading to quite different prices for insuring this risk.
The Chaucer report said the wildfires are also more complex to model than more conventional perils such as hurricanes due to numerous variables at play that can affect the size and intensity of the wildfire. M