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Fort McMurray wildfire loss estimate pegged at $4.6 billion: Property Claim Services data

June 2, 2016   by Canadian Underwriter


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The massive Fort McMurray wildfire is expected to cost the Canadian insurance industry $4.6 billion, according to data from Property Claim Services (PCS), a Verisk Analytics business.

The loss estimate of $4,630,800,000 includes property damage losses under residential, commercial and auto lines, as well as additional living expenses and business interruption amongst the categories of data that carriers submit to PCS. Photo: @RMWoodBuffalo.

The loss estimate of $4,630,800,000 includes property damage losses under residential, commercial and auto lines, as well as additional living expenses and business interruption losses amongst the categories of data that carriers submit to PCS. Liability and loss adjustment expenses are not included in the estimate figure.

The estimate compares to catastrophe modelling firm AIR Worldwide’s estimate last month of between $4.4 billion and $9 billion. This estimate reflected physical damage to residential and commercial property (structures and their contents, and auto) and direct business interruption losses (except for those related to the oil industry). Also in May, credit rating firm DBRS Limited estimated that the total claim costs for the wildfire would “likely be in the range of $2 billion to $6 billion.”

A voluntary, phased re-entry into the municipality began on Wednesday and will continue, with the exception of the neighbourhoods of Abasand, Beacon Hill and Waterways, the government of Alberta said in an update statement at 6:45 p.m. on Wednesday. Homes in these neighbourhoods cannot be occupied permanently until hazardous debris has been removed by the municipality. “Conditions will continue to be assessed daily and, if the situation changes, the re-entry schedule may be adjusted,” the statement noted, adding that boil-water and air-quality advisories remain in effect.

The wildfire remains out of control and is estimated to cover 581,695 hectares, including the Saskatchewan side, with a new perimeter estimate of 984 kilometres. There are 2,472 firefighters and support staff, 99 helicopters and 287 pieces of heavy equipment battling the fire, with an estimate of about 400 kilometres of fire guard completed.

“This community may look and feel very different than the community residents left last month,” said Alberta Premier Rachel Notley in the statement. “But it is still a strong community, and progress is being made every day to make it stronger.“

 

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