Wildfires: An expanding threat?
Large wildfires in the United States and Canada in 2015 and 2016, have highlighted a dangerous trend: wildfires are getting worse in frequency and severity, leading to greater destruction of property. In fact, 2015 was a record-breaking wildfire season. Wildfires, heat waves and drought produced $1.9 billion in insured losses in 2015, and set a new record for the number of acres burned in the United States.
Between January 1 and December 30, 2015, there were 68,151 wildfires across North America, which burned 10,125,149 acres, according to the National Interagency Fire Center (NIFC). During the same period in 2014, 63,417 fires burned 3,577,620 acres.
From 1996 to 2015, fires (including wildfires) accounted for 1.8 percent of insured catastrophe losses in the United States, totaling about $6.4 billion, according to Property Claim Services[R]; (PCS[R];), a unit of Verisk Insurance Solutions.
Wildfire severity is not limited to the United States; it's an issue in Canada too. For example, on May 1, 2016, a wildfire began southwest of Fort McMurray, Alberta, and continued to spread east into Saskatchewan. The fire scorched approximately 590,000 hectares (1,500,000 acres) and was one of the costliest Canadian natural disasters for insurers, destroying 2,400 homes and buildings. Two fatalities were attributed to the fire, and the entire population of about 80,000 was evacuated. PCS estimated the insurance industry loss from the Fort McMurray wildfires at C$3.98 billion, approximately US$2.96 billion.
Related: Natural hazards created havoc in 2016
The science of wildfire risk
Research shows that property location plays a significant role in determining exposure to wildfires. The primary risk factor is the distribution of vegetative fuels around a property location. Topography influences the speed of wildfire spread. Access -- or lack thereof -- for firefighting personnel and equipment is also critical. Experience proves that properties on dead-end streets or in single-access neighborhoods present added challenges for firefighters.
Remote sensing and digital mapping technologies can be very effective in analyzing location-specific risk factors. These technologies cover a plethora of useful data sources -- multispectral, hyperspectral, lidar, and radar data from satellites and from aerial sensors and drones. The data sources are harnessed by machine learning approaches in identifying the distribution of vegetative fuels, topography and accurate road network mapping, including precise property geolocation. Figure 1 shows fuel imagery from the Valley Fire in California in 2015.
Valley Fire analysis of loss data:
99 percent of the properties were in areas with fuel present
70 percent of the burned properties had slope problems
31 percent of the affected homes had road access difficulty
The combination of data can result in a telling integration of factors for a given site. Those factors can then be plugged into a mathematical model to derive an objective numerical score to be used in comparing wildfire risks for different properties. That can help underwriters write an appropriate policy based on the risk score.
Influences on changes in wildfire activity
Changes in wildfire activity from year to year (and decadal timescales) are influenced by climatic factors--fluctuations in temperature (warmer vs. cooler conditions) as well as drought conditions. These could be modulated by the effects of climatic phenomena like El NiEo/La NiEa. Other associated factors, such as earlier snowpack melting in spring, have also been reported in research articles.
Heightened wildfire activity in California in 2015 came amid a historical drought and serves as an illustrative example. In particular, prolonged drought combined with hot, dry, windy conditions was observed during the Valley Fire of September and October 2015, which burned 76,067 acres in Lake, Napa, and Sonoma Counties. In fact, the Valley Fire and the Butte Fire, another 2015 wildfire, were among the costliest ever in California history, according to PCS:
The Valley and Butte Fires in Northern California in September 2015 led to an estimated $1.2 billion in insurance losses.
The Valley Fire destroyed 1,955 homes and buildings in Lake, Napa, and Sonoma Counties, with more than $900 million in insured losses. It was the fifth-most damaging wildfire in California's history.
The Butte Fire destroyed 921 homes and buildings in Amador and Calaveras Counties, with an estimated $300 million in insured losses. It was the eighth-most damaging wildfire in California's history.
The two fires destroyed nearly 150,000 acres.
The U.S. Southwest, especially Southern California, is well known for rainfall shortages, but drought has also affected other areas. The southeast United States is not normally known for drought conditions, but the Gatlinburg Fire in Tennessee in November 2016, was precipitated by an extreme-to-exceptional drought at the time of the wildfire according to the U.S. Drought Monitor. The area received just 4.6 inches of rain from September through November 2016, down 70 percent from the average for that time period. Those drought conditions, combined with high wind speeds, helped spread the fire. Whether such conditions are due to climate change is being studied, but the threat is very real.
Research on climate change indicates that the risk of wildfires is likely to continue to grow as temperatures rise, lengthening the fire season. This is likely to be exacerbated further as more people move into forested areas once largely uninhabited.
Development in the wildland areas
Over the last several decades, rapid expansion of development -- construction of homes and buildings -- in wildland areas has come to play a critical role in enhancing the potential of structure losses to wildfires. These are areas where structures abut the wildland-urban interface (WUI) or intermingle with wildland-urban intermix, which are undeveloped natural areas. Homeowners demand such homes because they enjoy living in natural settings. Since 1990, 60 percent of all new housing units in the United States were constructed in WUI zones.
There was evidence of homes constructed in the WUI with natural materials such as wood, which becomes fuel in a wildfire, spreading the blaze and contributing to its severity. Along with drought, this appeared to be one of the contributing factors that made the Gatlinburg fire so devastating. The new construction materials are often cost-effective, but they can contribute to the severity of a fire because they are often lighter and less fire-resistant.
Researchers are discovering that wind-blown embers during wildfires cause most of the fires that burn homes. Homes less than 15 feet apart are more likely to burn in clusters. In such cases, fire is often spread by combustible fences and decks connected to houses, according to a study by the Insurance Institute for Business & Home Safety (IBHS).
The risk of wildfires is likely to continue to grow. Thirty-eight states have wildfire risks, according to IBHS, and the risk increases as more homes are built in wildland areas--some 5 million in California alone. Among the preventive features recommended in the IBHS study were noncombustible siding, decking and roofing materials; covered vents; and fences not connected to the houses. Combustible structures in the yard such as playground equipment, should be at least 30 feet away from the house, and vegetation should be 100 feet away.
In addition, California Insurance Commissioner Dave Jones believes the new reality could encompass a year-round fire season for the state, and encouraged residents to prepare now before another wildfire strikes.
Handling wildfire claims
When a policy is written to handle the wildfire risk, an insurer has already made a strong first step. Knowing the various risk factors and details of a property can help when a claim is made, although timing and safety remain two primary challenges.
While a wildfire is still burning, many insurers often deploy catastrophe response teams to begin the recovery process for policyholders. In these situations, remote sensing technology can be a useful tool. The availability of data of varying granularity streaming from satellites, drones and other aerial platforms can help provide a tremendous opportunity to monitor and assess wildfire-affected areas in real time.
Real-time analytics in the form of fire perimeters and maps of areas with active burning can support catastrophe teams too. Using a variety of geospatial platforms to analyze damage, it's possible to help determine how best to deploy response teams and understand the potential effects on policyholders.
Information on wildfire activity and exposures can help in developing catastrophe management plans, expediting the claims settlement process and enhancing customer satisfaction.
In a changing climate, science and technology lead to a deeper understanding of wildfires and what it takes to survive them. Insurers can benefit from tools that help score property risk while monitoring areas affected by wildfires. Underwriting, exposure management and claims can also assist in areas like prioritizing inspections for high-risk properties, leading to more effective inspections.
Building Materials Matter for Fire Protection
The building materials a homeowner or builder chooses for exterior components, such as roofs and siding, can increase the likelihood of a structure burning in a wildfire. In fact, most houses destroyed during a wildfire are ignited by brands or embers landing on the roof. Wood-shingle roofs are extremely vulnerable, and clay barrel-tile roofs offer the best protection. Stone-covered steel tiles are also extremely fire-resistant, and newer asphalt shingles are excellent, although they decompose more rapidly over time.
For siding, wood offers the least fire risk protection. Stucco is more fire-resistant, and brick masonry is very fire-resistant. Unfortunately, masonry structures are often brittle and vulnerable during earthquakes. In a state like California, that could be an issue.
Finally, no matter what type of material is used, it is vital that the roof, frame and siding are properly installed so no openings exist.
Arindam Samanta, Ph.D., (firstname.lastname@example.org) is director of product management and innovation at Verisk Insurance Solutions. He is a member of NFPA and IAWF.