RMS raises 2020 US wildfire loss estimate to between $7bn-$13bn

14 December 2020

Published by https://www.reinsurancene.ws/

USA – Catastrophe risk modeller RMS has raised its US wildfire loss estimate to between $7 billion and $13 billion, two thirds higher than the previous figure.

RMS had earlier this year placed US wildfire’s impact on the global re/insurance industry at between $4 billion and $8 billion.

This latest estimate accounts for damage to 10,400 structures in Northern California, 6,365 in Oregon and Washington, and another 948 structures in Colorado.

2020 looks set to become the third most costly wildfire season on record, according to the midpoints of RMS’ last two loss estimates.

The catastrophe modeller’s increase includes more recent wildfire activity and could see some carriers increase their loss reports, Credit Suisse analyst Mike Zaremski has said.

Jefferies analysts had previously placed US wildfire losses at around $11.5 billion after October, while broker Aon expected a figure close to $8 billion.

It will be interesting to see how this latest estimate impacts the fourth quarter financial reports from insurers, and could provide an insight into how vigorously some had reserved in the first place.