KBRA Releases Research Report on the California Wildfires and (Re)insurance Implications
NEW YORK--(BUSINESS WIRE)--Nov 15, 2018--Kroll Bond Rating Agency (KBRA) releases a research report entitled Despite Devastation and Tragedy, California Wildfire Losses Manageable for (Re)insurers.
For the second year in a row, California is experiencing some of the most devastating and catastrophic wildfires in the state’s (and country’s) history. In 2017, over 10 million acres burned; and 2018 has seen the most structures destroyed by one single fire. Several estimates put the current insured losses in the range of $2 billion to $6 billion. KBRA expects these losses to be manageable for most (re)insurers. Unfortunately, many lives have been lost.
The California Department of Forestry and Fire Protection (CAL FIRE) reports the Camp and Woolsey wildfires have already destroyed close to 10,000 structures and burned close to 240,000 acres. Five of the top-nine most destructive California wildfires have occurred in 2017 and 2018. As California wildfires have raged, there has been some concern that certain homeowners might find it increasingly difficult to obtain insurance.
Despite the increasing wildfire losses, insured losses from wildfires pale in comparison to hurricanes. Prior to 2018, the top ten wildfire losses combined totaled just over $20 billion in insured losses. This would rank around 7 th of the all-time costliest catastrophes. Unlike Florida, where most of the leading national insurers substantially reduced their market share following Hurricane Andrew, the leading national insurers maintain a majority of the California homeowners exposure. KBRA expects a significant amount of the wildfire losses to remain with these insurers as opposed to their reinsurers.
However, with the Santa Ana winds blowing hard, this could change the insured losses. Close to 50,000 homes are at high or extreme risk, with a combined replacement cost value of nearly $20 billion. With both the Camp and Woolsey fires approximately 50% contained, considerable risk remains.
To view the report, please click .
CONNECT WITH KBRA
About KBRA and KBRA Europe
KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus, is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
View source version on businesswire.com:https://www.businesswire.com/news/home/20181115006014/en/
Fred DeLeon, Director
Andrew Edelsberg, Managing Director
Donna Halverstadt, Managing Director
KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA FLORIDA NEW YORK
INDUSTRY KEYWORD: PROFESSIONAL SERVICES FINANCE INSURANCE
SOURCE: Kroll Bond Rating Agency
Copyright Business Wire 2018.
PUB: 11/15/2018 03:49 PM/DISC: 11/15/2018 03:48 PM