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The Jasper wildfire could cost the insurance industry up to $700 million, making it one of the costliest wildfire disasters in Canadian history, DBRS Morningstar said Friday.
In a new report, the credit rating agency said it believes potential insured losses from this week’s disaster could come close to or even exceed those incurred in the 2011 wildfire in Slave Lake, Alta. , which – adjusted for inflation – reached about $700 million.
The only fire to top that disaster was the 2016 wildfires in Fort McMurray, Alta., which resulted in inflation-adjusted insured losses of $4.4 billion and were the costliest wildfires in Canadian history.
Although the extent of the damage in Jasper is not yet fully understood, it is estimated that about a third of the town’s site, including at least one hotel, may have been destroyed in this week’s fire. There are a total of 1,113 structures in the town.
“In addition, Jasper National Park is one of the most popular tourist destinations in Canada, which could cause insurers to face additional business claims related to commercial construction losses and business interruption,” DBRS noted.
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All essential infrastructure on the town site was successfully protected, including the hospital, emergency services building, schools, activity center and waste water treatment plant.
The Jasper fire is just one of many wildfires currently burning in Western Canada.
DBRS said it is still too early to predict whether the 2024 wildfire season will be similar to 2023, which was the most active and destructive wildfire season on record with 165,000 square kilometers burned.
So far in 2024, 24,000 square kilometers have burned.
While wildfires were not a major contributor to Canada’s insured natural catastrophe losses historically, they have become a greater concern since 2021, DBRS noted.
Canada experienced two major wildfires in 2021 and three in 2023, which represented about a third of the insurance industry’s total $3.1 billion in severe weather losses in 2023.
Overall, extreme weather events are becoming more frequent and more severe, according to the DBRS report.
He said that while the situation is dire, he expects the ongoing 2024 wildfire season to be manageable for Canadian property and casualty insurers as long as no large urban areas are significantly affected.
& copy 2024 The Canadian Press
(Except translation, this story has not been edited by achinews staff and is published from a syndicated feed.)
source link https://globalnews.ca/news/10646346/jasper-wildfire-insurance/
