USA: Insurance and reinsurance industry losses from the recent California wildfire outbreaks are expected to hit $8 billion, making the event the costliest insured wildfire loss on record, according to Aon Benfield unit Impact Forecasting.
With insurers estimates of losses now coming in and at the high-end of expectations in some cases, it is clear that the recent wildfires in the California wine region and other areas of the state are going to aggregate into the largest impact this peril has had on insurance and reinsurance markets.
Already Travelers has reported a loss of up to $675 million after reinsurance, AIG up to $500 million, AXIS Capital said from $35 million to $45 million, Beazley said it was adding to its recent cat losses, while reinsurer RenaissanceRe warned that the California wildfire impact could be material.
The California Insurance Commissioner recently said that claims filed had already exceeded $3.3 billion, while risk modeller loss estimates were topped by RMS which said it could be as much as $8 billion on an economic basis, with the majority insured.
It looks like the higher estimates are proving to be correct, as Aon Benfield’s Impact Forecasting unit now joins those calling for an eventual industry impact of around $8 billion.
In recent days other estimates from industry sources have suggested the insurance and reinsurance sector loss would be between $7 billion up to $10 billion, so the sector appears to be coming to similar conclusions on how big an event this is likely to be.
Impact Forecasting, the catastrophe risk modelling and analysis unit of reinsurance broker Aon Benfield, said that with the insured loss expected to hit as high as $8 billion as additional claims come in, it believes that the economic toll could be higher still.
The reinsurance and ILS fund sector will pay for a portion of these claims. ILS markets will likely find the impact relatively small, compared to other recent loss events, but further attrition is likely to many private ILS and collateralized reinsurance funds following the California wildfire event.