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Wildfires

Rain fuels wildfire risk

First the north burned, then the south: Two series of devastating wildfires in October and December left behind a trail of destruction in California and losses totalling well over ten billion dollars. It is to be feared that such wildfires will become more frequent in California in the future.

The October wildfires broke out in the wine country around Sonoma and the Napa Valley north of San Francisco, leaving unprecedented levels of damage in their wake and surpassing the 1991 Oakland Hills Fire as the worst conflagration in the state’s history. In all, over 8,900 structures were destroyed by the fires, over 5,500 of which were from one fire alone – the Tubbs Fire – that obliterated complete neighbourhoods in the city of Santa Rosa. Two months later, Santa Ana winds fuelled a devastating complex of fires around the Los Angeles metropolitan region. Insured losses from all the Northern California fires alone are estimated at about US$ 8bn, becoming the largest insured wildfire loss in US history (by far) and a worrisome harbinger of the future of wildfire risk.

Background to the fire

After six years of extreme drought in California, the state’s warmest and driest period in its recorded history, the winter of 2016–2017 ended the streak of dry weather in dramatic fashion. Northern California saw its wettest winter on record. The three-month winter deluge effectively ended the drought in Northern California. Of course, vegetation immediately responded to the much-needed rains, and new grass, chaparral, and other types of vegetation turned the Golden State green for the first time in years.

When the deluge finally ended in April, for the next five months the West Coast barely received any additional rainfall. This led all the new vegetative growth to dry out, becoming a massive source of fuel for potential wildfires. Not surprisingly, the return of dry conditions and new fuels helped cause an early start to California’s fire season. By the time the peak wildfire season in late September arrived, a near-perfect combination of heat, low humidity, and fuels made the state a tinder box. In early October, the National Weather Service put out a “Red Flag Warning” for extreme fire risk in Northern California; in December, similar warnings were given for the Los Angeles region.

Wet-dry cycle increases the wildfire hazard

Large wildfires typically require two meteorological ingredients: dry conditions and high winds. However, as the events of 2017 show us, it does not take years of extreme drought conditions in California to create optimal conditions for wildfires, just a couple of months of dry conditions are sufficient. Furthermore, our changing climate is also making California hotter, which means that the rate of evapotranspiration has increased. In short, dangerous fire conditions return to California faster today than they did in the past.

The second ingredient, high winds, can arise from several different meteorological sources. Most large historical wildfires in California have been associated with so-called “Santa Ana” or “Diablo” wind events. These occur when high pressure over the western United States causes dry, easterly winds from inland to be funnelled through mountain passes, causing an increase in velocity.

The Tubbs Fire in Northern California caused the highest insured wildfire loss in US history

Two major fire outbreaks

The costliest wildfire from the Northern California event, the Tubbs Fire, was ignited around 10 p.m. local time on 8 October near the town of Calistoga. Gusty northeasterly winds of 50–70 km/h caused the fire to spread rapidly. The intensity of the Diablo winds continued to increase as the night went on, ultimately reaching speeds of 100 km/h. Evacuations for Santa Rosa and Sonoma County were ordered by local emergency management as the flames advanced into residential neighbourhoods. In all, over 5,500 structures were destroyed by the Tubbs Fire, most of them within 24 hours of its ignition, incurring – together with some other nearby fires – an estimated insured loss of US$ 4.2bn.

Around the same time on 8 October, the Atlas Fire broke out to the east of Napa. Similar to the Tubbs Fire, the conflagration grew rapidly, ultimately burning an area of 210 km2. Although the towns of Napa, Yountville and other farming communities escaped relatively unscathed, the Atlas Fire destroyed 487 buildings and damaged 90 others, in all causing insured losses exceeding US$ 2.8bn.

The Southern California wildfire event started two months later on 4 December, when the Thomas Fire began in a canyon in Ventura County, about 100 km from downtown Los Angeles. The fire grew explosively due to gale-force Santa Ana winds and over the course of the next two weeks scorched over 1,140 km2, becoming the largest wildfire in the state’s history and destroying at least 800 buildings. Other notable fires in this outbreak include the Lilac Fire in San Diego County that destroyed about 200 structures, and the Skirball Fire, which burned six mansions in the enclave of Bel Air. An additional 15,000 structures were at risk from these fires.

The Thomas Fire close to Santa Barbara: The largest wildfire in California's history

Insurance impacts and underwriting lessons

It is estimated that the Northern California fires of 2017 caused in excess of US$ 10bn in overall economic losses, of which about US$ 8bn was insured, with the Tubbs Fire being the costliest. These fires are the most damaging in the state’s history, surpassing the losses caused by the infamous 1991 Oakland Hills Firestorm (US$ 3bn insured loss, US$ 4.5bn overall loss, values in 2017 dollars).

Three key factors helped contribute to the loss severity of these events. The first is that the fires impacted several affluent communities with extremely high property values; every structure lost to the fires was essentially a million-dollar claim. Second, the large population and exposure base in the region allowed for extensive smoke damage claims. And third, commercial buildings accounted for almost 20% of the loss from the fires, about double that of past wildfire events. This is due to the impacts of businesses in urban Santa Rosa, damage to wineries in Napa County, and the destruction of a hospital complex in Ventura.

The time of day and speed at which many of the fires of 2017 developed illustrates the potential difficulty in protecting homes in fire country. Although private fire services are useful in saving a home, the best preventative measures against wildfires continue to be (1) using flame-retardant construction materials in your home, (2) using native plants in landscaping and planting them a distance from your home, (3) removing vegetative debris from your yard, roof and gutters, and (4) maintaining a defensible perimeter of at least 25–30 metres around your home. However, only if an entire community participates in making their town wildfire-resistant can these measures be truly effective.

The future of the California wildfire risk

A La Niña event has developed for the winter of 2017–18 and will likely bring below-average precipitation to California for this period, potentially prolonging the fire risk through the winter months. A lack of heavy rains may, in some respects, actually be helpful to areas impacted by the fires of 2017, as excessive amounts of rainfall in a short period of time may act to destabilise scorched hillsides, increasing the landslide and mudslide risk.

Looking further into the future, insured losses from large wildfires in the American West are expected to continue to increase in frequency and severity. This increase is primarily being driven by continued construction of new homes and businesses within the wildland-urban interface and increasing values of both real and personal property. However, the influence of climate factors on this peril is becoming harder to ignore.

Warming temperatures, in part due to anthropogenic influences, are extending the wildfire season, and the prolonged, recent bouts of heat and drought have stressed trees, making them more vulnerable to disease, insects and fires. With neither of these trends likely to change in the coming years, the emphasis must be on improving buildings’ resistance to wildfires, and making sure that entire communities take steps to mitigate their collective risk.

Further Information
Munich Re Experts
Mark Bove
is Senior Research Scientist at Munich Reinsurance America, Inc.
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