The Risks of Hazard

Wildfire has been big news in 2015. The USA and Canada are both having epic years, as long-term droughts combine with hotter and drier-than-normal temperatures in much of the West burning more acres and buildings than ever. Yet, when I talk to carriers about risk analytics, wildfire seems like an ignored peril. Why?

Historically, wildfire has been underwritten (or excluded) based on proximity to trees. Historically, that was adequate, too. But over the past 20 years, as towns and suburbs have expanded into wildland, the exposure to losses has increased exponentially. This week, AM Best (mind the subscription-wall) is reporting on Guy Carpenter’s estimated losses for the Western US in 2015 and the figures are eye-catching: $1.75 billion.

Godzilla is coming! In the past 10 days or so, the impending El Niño has been universally dubbed “Godzilla” because it is being forecast as the largest (or almost largest) such event in 50 years or more.

Headline writers love it:

• El Niño fascination grows colorful: It's turbulent, massive, Godzilla-like and even 'Bruce Lee' - The Oregonian
• Will ‘Godzilla’ El Nino terrorize KC this winter? Forecasters and Farmer’s Almanac disagree - The Kansas City Star
• Will ‘Godzilla El Niño’ Terrorize Colorado This Winter? - CBS Denver
• Shark Encounters Increase as El Nino Approaches - SFGate (this one deserves a link)
• What happens when ‘the blob’ meets Godzilla El Niño? Climate chaos and more hot, dry weather for B.C. - Canada’s National Post

The Global Language Monitor has added a new usage of “Godzilla” to the English Language Lexicon because of all this, and Your Dictionary has added a second definition to their Godzilla entry. To give credit where it’s due, here is Bill Patzert at NASA’s Jet Propulsion Laboratory who appears to have coined the phrase.

The coverage is very much focused on what types of weather we can expect in the autumn and winter from this year’s El Niño. Speculation is rampant on what California will experience, and almost every city in North America has a local look on what might be coming. Floods, droughts, warmer weather, colder weather, blizzards – it’s all there, depending in where you look on the continent. And it’s all reasonable…at least as reasonable as anything described as “Godzilla” can be.

On AM Best’s online TV channel, there is an interesting story featuring Philadelphia Insurance Company’s joint effort with the Arbor Day Foundation to plant 80,000 trees in an area of Texas that has been devastated by wildfire. (Click here to watch the full video.) I sent the link to my friend Chris White, of Anchor Point in Boulder (creators of the No-HARM model for wildfire risk) to get his perspective on the initiative through the lens of wildfire risk.

Have you heard it’s raining in California? Los Angeles has broken precipitation records for July, and there have been flash floods throughout southern California and Arizona. The Angels even had a ball game rained out for the first time in over 20 years. The moisture has helped with the drought and a bad wildfire season, but it has added to the headaches of property insurers writing in California. Weather from the west coast is regularly newsworthy, but this past week has been extraordinary. How weird has it been? It even snowed in the Sierra Nevada this week.

Summer is here, and in the Pacific Northwest and Western Canada, it really feels like it. Record highs are being set all over the region, the Calgary Zoo is closed so the animals can be cooled, and the wildfires are burning.

The most newsworthy wildfire so far is the Sleepy Hollow wildfire in Wenatchee, WA. It's burning homes and industrial buildings, and as of today is only 10% contained. It will get bigger before it gets smaller.