The head of Aon’s reinsurance solutions catastrophe analytics team for the US, Liz Henderson, has hailed the progress made in wildfire risk modelling, but acknowledged there is still room for improvement.
Wildfire models have often been considered less mature than the models used to understand perils such as hurricanes and earthquakes.
Speaking to InsuranceERM in Chicago, Henderson, who is also Aon’s global head of climate risk advisory, said the majority of research from catastrophe modelling vendors has been on tropical cyclone and earthquakes.
She commented: “Since the highly destructive Tubbs fire in Northern California in October 2017 and the Camp fire in California in November 2018, we are now only on the second or third generation of wildfire risk models.
“I do agree that there's still a lot more to be done, but wildfire risk models are significantly better than they were.”
She added: “Following decades of population growth and varying levels of forest management, wildfire risk has shifted or intensified in some regions. These issues are accounted for in the models, but whether or not the models are applying it with the right frequency, or providing a full and complete picture of how the events will occur, there are always lessons to be learned.”
Henderson’s comments come after wildfires tore through the Los Angeles area last month displacing tens of thousands of people and claiming at least 29 lives. The series of January blazes are on track to become the most expensive insured wildfire event in US history, beating the Tubbs fire ($16bn) and Camp fire ($14bn).
She added: “Wildfire risk is a peril that is changing more rapidly than what you would expect from hurricanes. The behaviour of hurricanes is changing as well, but it’s at a slower time scale.”
- Read more about wildfire risk modelling in InsuranceERM’s special report Natural Catastrophes: Flood, Fire & Storm, free to download here
- InsuranceERM and Bellwether are also hosting a free webinar on wildfire risk management this coming Wednesday 19 February at 3pm GMT. Register to join here
