California facing multi-billion-dollar losses from wildfires
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1 California facing multi-billion-dollar losses from wildfires A series of major wildfires burned across Northern and Southern California, as powerful offshore winds known as Santa Ana winds in the south and Diablo winds in the north helped spawn the blazes. Downsloping winds off the Coast Range and Sierra Nevada mountains were critical in the fire ignition process. The most catastrophic fire was the Camp Fire in Butte County, where the city of Paradise was largely destroyed. CalFire cited that 6,453 homes and 260 businesses were destroyed, making the Camp Fire the most destructive on record in California. The fire also left 29 people dead and many others unaccounted for; equaling as the deadliest fire on record in the state. Additionally, the Woolsey Fire destroyed at least 177 homes and left two people dead in Ventura and Los Angeles counties. The aggregate cost of the fires is expected to result in a multi-billion-dollar payout for the insurance industry. Meteorological Recap The Storm Prediction Center (SPC) and National Weather Service (NWS) offices in initially California declared Extremely Critical and Critical fire conditions across parts of Northern and Southern California on November 8 and November 9. The local agencies noted the arrival of a strong and broad offshore wind flow that would dramatically increase the probability of strong winds across the higher terrain and foothill areas of Los Angeles, Ventura, and Orange and Riverside counties in Southern California and into the Sierra and southern Sacramento Valley regions of Northern California. The Santa Ana and Diablo wind events were triggered by a strong ridge of high pressure that established across parts of Idaho on November 7 and eventually shifted eastward into much of the Great Basin on November 8. As this occurred, it enhanced the risk of fire ignition given extremely dry conditions in place across the state and abundant available fuel to burn. See the graphic above. In parts of Northern California, soil moisture levels were extremely low due to minimal rainfall since the summer. These conditions led to many parts of the state with an Energy Release Component (ERC) value minimally in the 90 th percentile or above. ERC is an index that evaluates composite fuel moisture values in relation to all live and dead fuels (vegetation) and their potential fire intensity if burned. As moisture levels in both live and dead vegetation goes down, more fuel becomes available to a fire in that area. More fuel burning results in more heat being released. This drying pattern and extreme fire potential was seen across Northern California. During the early morning hours on November 8, winds blowing out of the northeast gusted as high as 55 mph (90 kph) that severely enhanced the fire risk across much of California. These gusty winds in combination with very low humidity levels and dry soils allowed for multiple fires to be ignited. Index evaluating fire & heat intensity potential (Source: Northwest Climate Toolbox)
2 The most significant fire to ignite was in Butte County, California near the city of Paradise in Northern California. According to Cal Fire, the Camp Fire officially started at 6:29 AM local time on November 8 at Camp Creek Road near Pulga and quickly shifted westward towards Paradise. Data from the National Weather Service (NWS) indicated that while temperatures were in the upper 40s (F), relative humidity levels hovered near 20 percent and winds had gusted above 50 mph (80 kph) in a direction from the northeast and north-northeast signifying a strong Diablo wind event. After igniting, the fire rapidly spread across 20,000 acres (8,093 hectares) in a matter of hours through Paradise and surrounding areas. In just 24 hours time, CalFire officials noted that the Camp Fire had charred 70,000 acres (28,327 hectares). Later on November 8, multiple fires were additionally ignited in Southern California. At 2:30 PM local time in Ventura County, the Woolsey Fire erupted with the SPC noting extremely critical fire conditions in place. As moderate Santa Ana wind conditions persisted, along with abundant vegetative fuel available to burn, this led to explosive spread in burn coverage. The blaze also burned 70,000 acres (28,327 hectares) in roughly hours time. During the explosive growth of the fire coverage, it rapidly approached areas near the city of Malibu. Another fire the Hill Fire was also ignited on November 8. That fire began at 2:00 PM local time in Ventura County before quickly burning 4,531 acres (1,833 hectares) of land. Daily Fire Weather Outlooks from November 7-12 (Source: NOAA) Cat Alert: California Wildfires (Information as of 11:00 PM Central Time, November 11, 2018 (05:00 UTC November 12)) 2
3 By November 10 and November 11, the SPC noted that conditions were again becoming highly conducive for even more powerful offshore wind flow across both Northern and Southern California. An amplifying upper-level frontal boundary along the coastline began interacting with a surface ridge of high pressure located to the northeast. This interaction led to a strong pressure gradient to develop across California; the tighter the pressure gradient, the more intense winds. The SPC cited critically low relative humidity and dry fuels would allow for conditions favorable for rapid fire spread/growth in multiple locations in the state. Such conditions were ideal for a Santa Ana wind event in Southern California and a dry, downsloping flow along the Coast Range and the Sierra Nevada mountains to develop. These conditions allowed for the Camp, Woolsey, and Hill fires to further spread during the period from November The SPC forecasts continued extremely critical fire conditions to persist through November 13. Background: Fire Ignition Timeframe Below is a table indicating fire ignition dates, times and damage of the most significant fires from this event. Data comes via Cal Fire: Fire Name Fire Start Date Fire Start Time Fire Start County Structures (Destroyed) Structures (Damaged) Camp Fire 6:29 AM November 8 Butte 6,713 0 Woolsey Fire 2:30 PM November 8 Ventura Hill Fire 2:00 PM November 8 Ventura 2 2 Background Weather Data A significant dearth of rainfall has affected much of California since the start of the current water year (beginning on October 1, 2018), and even prior to that time. Most areas have recorded less than five percent of the normal rainfall during this period. The extreme lack of precipitation aided in causing the tremendous amounts of dead vegetation to provide ample fuel for new wildfires to consume.. As the Santa Ana, Diablo and offshore/downsloped winds established on November 8, the lack of recent rainfall and extensive dry vegetation and brush combined to create extremely conducive conditions for a major outbreak of wildfires. The graphics below show current precipitation values in context with a normal timeframe. LEFT (2018/19 Water Year % Normal Precipitation) / RIGHT (Rainfall % Normal Since May 11, 2018) Cat Alert: California Wildfires (Information as of 11:00 PM Central Time, November 11, 2018 (05:00 UTC November 12)) 3
4 Beyond a lack of precipitation across much of California, the last 60 days since the approximate start of Fall has seen anomalously warm temperatures. As noted on the graphic to the left, areas with some of the warmest average daily temperatures are currently coping with wildfires. This includes the Camp, Woolsey, and Hill fires. The combination of warmer temperatures and less precipitation at the start of the typical wet season for California has resulted more time for vegetation to dry out and be vulnerable. Dry Fall months are particularly risky since summer-like vegetation dryness persists longer into "offshore wind" season. Santa Ana Winds vs. Diablo Winds Both Santa Ana winds and Diablo winds are caused by nearly identical meteorological conditions. The only difference is that the wind pattern is known as Santa Ana in Southern California and Diablo in Northern California. Northern California high wind and fire events are also highly susceptible to strong downsloping winds from the Coast Range and Sierra Nevada mountains. Santa Ana wind events are typically most comment between the months of September and April, and the average duration is roughly two days. The continuation of Santa Ana conditions in Southern California lasting for nearly a week is anomalous. Separately, Diablo wind events are most common during the Spring and Fall months, though these events are most dangerous during the Fall months due to much drier vegetation. Source: WeatherFlow.com Cat Alert: California Wildfires (Information as of 11:00 PM Central Time, November 11, 2018 (05:00 UTC November 12)) 4
5 Damage Details Camp Fire The Camp Fire was officially deemed the most destructive and deadliest wildfire on record in California. Ignited during the morning hours on November 8, the fire achieved its name after having begun near Camp Creek Road in Butte County. Most of the event s damage was incurred during the first 48 hours (November 8-9) as the blaze quickly exploded in size and scope, which included catastrophic damage in the town of Paradise. As the fire rapidly spread, state and county officials ordered the evacuation of Paradise, Magalia, Concow, Butte Creek Canyon, and Butte Valley given the intensity of the fire and its consumption of lots of available vegetative fuel. In total, an estimated 52,000 people evacuated. As of 7:00 PM local time on November 11, the Camp Fire had charred 111,000 acres (44,900 hectares) of land across Butte County. Containment was listed at 25 percent. The fire had officially left 29 people dead and injured three firefighters. Fire officials noted that as many as 228 people remained unaccounted for as search and rescue operations continued. CalFire does not yet list an official cause of the fire, though firefighters were initially dispatched to a fire which had been sparked under and near downed power lines located near Poe Dam on the Feather River. Camp Fire on November 8 (Source: NASA) The fire s rapid spread caught many residents of Paradise by surprise as the town of roughly 27,000 people fled. Reports indicate that as much as 90 percent of the city was destroyed. Homes, businesses, vehicles, churches, five schools, a hospital, and a rest home were all destroyed by the fast-moving flames. The historic Honey Run Covered Bridge along Centerville Road which connects Paradise and Chico was also lost. Other areas, while not directly enduring flames from the Camp Fire, were heavily impacted by the large plume of smoke which blew west-southwestward into Chico and towards San Francisco, Sacramento, and San Jose. Cat Alert: California Wildfires (Information as of 11:00 PM Central Time, November 11, 2018 (05:00 UTC November 12)) 5
6 Woolsey Fire The Woolsey Fire was ignited during the afternoon hours on November 8 in Ventura County. The blaze quickly spread and covered parts of Ventura and Los Angeles counties during the next 72 hours as it destroyed 177 homes and other structures. Two other structures were listed as damaged. The fire was blamed on two fatalities. As of 7:00 PM local time on November 11, the Woosley Fire had burned 85,500 acres (34,600 hectares) of land and was 15 percent contained. The quick-moving nature of the fire was enhanced by Santa Ana winds gusting to 60 mph (95 kph). After tracking through Liberty Canyon in Agoura Hills, it would later jump U.S. Route 101 near Calabasas while headed towards the city of Malibu. Mandatory evacuation orders were issued for the cities and towns of Malibu, Calabasas, Bell Canyon, Oak Park, and Thousand Oaks. In total, more than 265,000 people were mandated to evacuate from their homes. Substantial damage was incurred to numerous high-value properties in Ventura and Los Angeles counties. This included numerous celebrity homes and several filming and historical sites. Of note, the Paramount Ranch (the site of many Hollywood productions, Reagan Ranch in Malibu Creek State Park, and the Peter Strauss Ranch were each destroyed. The Santa Susana Laboratory was partially damaged. Two other notable rehabilitation facilities Seasons in Malibu and Creative Care were also significantly damaged. It is worth noting that Ventura County was also the primary site of December 2017 s Thomas Fire. Hill Fire The Hill Fire also ignited during the afternoon hours on November 8 in Ventura County. The fire quickly grew to 4,531 acres (1,833 hectares) but firefighters were able to make fast progress on establishing a perimeter. Containment was listed at 75 percent. A damage survey indicated that two structures had been destroyed and another two were damaged. Cat Alert: California Wildfires (Information as of 11:00 PM Central Time, November 11, 2018 (05:00 UTC November 12)) 6
7 Financial Loss As the fires continue to burn and assessments remain in their infancy, it is too early to provide a specific economic or insured loss estimate at this time. The forecast for further favorable wildfire conditions additionally raises the possibility of additional fires in the coming days. However, the scope of confirmed damage already attributed to the Camp and Woolsey fires indicates that a significant financial cost is likely; especially when compared to damage and resultant costs incurred from recent fires in 2017 and 2018 in Northern and Southern California. It is anticipated that the insurance industry is facing a multibillion-dollar aggregated payout from the November fires. The overall economic cost which includes uninsured damage to things such as infrastructure, the electrical grid, agriculture, forestry, etc. is likely to be even higher. Any percentage of underinsurance for properties would additionally be included in the overall damage cost. The wildfire peril has become increasingly costly for the insurance industry in recent years. Annual insurance payouts (adjusted to 2018 dollars) have surpassed the USD1 billion threshold just nine times since However, 2018 marked the fourth consecutive year of such an occurrence even prior to the November wildfire events in California. The historic 2017 wildfires in the United States led to nearly USD16 billion in insurance payments; almost entirely from the October and December events in California. Cat Alert: California Wildfires (Information as of 11:00 PM Central Time, November 11, 2018 (05:00 UTC November 12)) 7
8 Beyond changes in fire behavior, insufficient fire suppression tactics, growing climate change enhancements to weather phenomena, changing fire behavior, and a nearly year-round fire season are all leading to greater wildfire risk in California, there has been increasing population and exposure growth into counties and areas known to be at risk to wildfires. These areas are known as the Wildland Urban Interface (WUI). In a 2010 report by the California Department of Insurance, it was determined that an estimated 4.46 million homes or 32.6 percent of all homes in California were living in WUI areas. Given the continued increase in annual population since that time, it is likely that this figure has continued to grow. The continued growth in exposure and population in these known areas means that there is greater opportunity for costly events to occur. This is especially true if larger and more intense fire events are realized. Source: California Department of Insurance The graphic below analyzes growth in the number of housing units in Northern and Southern California since The year 1991 was selected given the catastrophic fire in Oakland Hills that caused an estimated USD3.1 billion in insured losses (2018 USD), and seeking to determine if that fire had any deterrent on counties located in fire-prone locales. Cat Alert: California Wildfires (Information as of 11:00 PM Central Time, November 11, 2018 (05:00 UTC November 12)) 8
9 Miscellaneous Info Below is a table listing the Top 20 most destructive wildfires on record in California. Seven out of the top 20 events including half of the top 10 have occurred in the past 13 months (October 2017). These events are labeled below in RED, including the active Camp Fire. Rank Fire Name Start Month Affected Counties Acres Burned Structures (Destroyed) 1 Camp November 2018 Butte 111,000* 6,713* 2 Tubbs October 2017 Sonoma 36,807 5,636 3 Tunnel (Oakland Hills) October 1991 Alameda 1,600 2,900 4 Cedar October 2003 San Diego 273,246 2,820 5 Valley September 2015 Lake, Napa & Sonoma 76,067 1,955 6 Witch October 2007 San Diego 197,990 1,650 7 Carr July 2018 Shasta & Trinity 229,651 1,604 8 Nuns October 2017 Sonoma 54,382 1,355 9 Thomas December 2017 Ventura & Santa Barbara 272,000 1, Old October 2003 San Bernardino 91,281 1, Jones October 1999 Shasta 26, Butte September 2015 Amador & Calaveras 70, Atlas October 2017 Napa & Solano 51, Paint June 1990 Santa Barbara 4, Fountain August 1992 Shasta 63, Sayre November 2008 Los Angeles 11, City of Berkeley September 1923 Alameda Harris October 2007 San Diego 90, Redwood Valley October 2017 Mendocino 36, Bel Air November 1961 Los Angeles 6, Below are the most damaging wildfires in California during 2018, including active fires in RED. The data is available from CalFire: Fire / Complex Name Start Month Affected Counties Acres Burned Structures (Damaged/Destroyed) Fatalities Camp Nov Butte 111,000 6, Carr July 2018 Shasta 229,651 1,883 Mendocino Complex July 2018 Mendocino, Lake Colusa, Glenn 459, Woolsey Nov Ventura 83, Donnell August 2018 Tuolumne 36, Klamathon July 2018 Siskiyou 38, West July 2018 San Diego Pawnee June 2018 Lake 15, County June 2018 Yolo 90, Delta/Hirz Sept Shasta 63, Holiday July 2018 Santa Barbara Holy August 2018 Orange, Riverside 23, Cat Alert: California Wildfires (Information as of 11:00 PM Central Time, November 11, 2018 (05:00 UTC November 12)) 9
10 Based on data from CalFire as of November 9, the state of California had recorded roughly 1.56 million acres (631,000 hectares) of land burned by wildfires in It is presumed that even more acreage has burned since that time. This would mean that 2018 has burned the most acres in the state since at least Perhaps an even more important data point is the number of acres burned per fire since it helps provide a scale of the size of fires occurring during the year. Current data shows that 2018 ranks as the third-most acres burned per fire since 1987, only trailing 2008 and Additional and updated details will be found in this week s Weekly Cat Report. Cat Alert: California Wildfires (Information as of 11:00 PM Central Time, November 11, 2018 (05:00 UTC November 12)) 10
11 About Aon Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance. Aon plc All rights reserved. The information contained herein and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information and use sources we consider reliable, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. Copyright by Impact Forecasting No claim to original government works. The text and graphics of this publication are provided for informational purposes only. While Impact Forecasting has tried to provide accurate and timely information, inadvertent technical inaccuracies and typographical errors may exist, and Impact Forecasting does not warrant that the information is accurate, complete or current. The data presented at this site is intended to convey only general information on current natural perils and must not be used to make life-or-death decisions or decisions relating to the protection of property, as the data may not be accurate. Please listen to official information sources for current storm information. This data has no official status and should not be used for emergency response decision-making under any circumstances. Cat Alerts use publicly available data from the internet and other sources. Impact Forecasting summarizes this publicly available information for the convenience of those individuals who have contacted Impact Forecasting and expressed an interest in natural catastrophes of various types. To find out more about Impact Forecasting or to sign up for the Cat Reports, visit Impact Forecasting s webpage at impactforecasting.com. Copyright by Aon plc. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise. Impact Forecasting is a wholly owned subsidiary of Aon plc. Cat Alert: California Wildfires (Information as of 11:00 PM Central Time, November 11, 2018 (05:00 UTC November 12)) 11
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