In the past, this blog has asked rhetorically “Why do insurers ignore wildfire?” It’s a peril that causes real losses (about $6B in the past 20 years in the USA alone), yet has data and analytics that can significantly improve residential and commercial underwriting for it. The readership metrics for Risks of Hazard reinforces the question: blogs about wildfire get opened less than any other subject we write about. Today, let’s answer that rhetorical question: Here is why insurers pay less attention to wildfire than they should.
Every summer, wildfire is high profile. The names of some recent fires are evocative: Rim, Sleepy Hollow, Waldo Canyon. This year the headlines are coming from the East: Pennsylvania has the Lehigh Valley Fire, and the late April NFS situation report lists fires in six eastern states. In Canada, the news is harrowing as Fort McMurray (pop. 80,000) is being evacuated as the city burns. Notoriety and media coverage is not the problem.