Evolving natural disaster risk reveals a less obvious yet far-reaching consequence for insurers: Traditional methods of managing risk concentration can't keep up with a constantly changing risk landscape. (Credit: BuildMetrix) Evolving natural disaster risk reveals a less obvious yet far-reaching consequence for insurers: Traditional methods of managing risk concentration can’t keep up with a constantly changing risk landscape. (Credit: BuildingMetrix)

The 2018 Camp Fire in Northern California left behind devastation in many forms: burned-out businesses, incinerated homes, charred cars. In total, the fire destroyed nearly 19,000 structures and claimed the lives of 85 people. The blaze also caused another casualty: A regional insurer was forced into liquidation in part because it had taken on too much risk in areas affected by the fire.

The Camp Fire was extraordinary in its scale. It highlighted the fact that wildfires are becoming increasingly destructive and difficult to model using traditional, historical data-driven methods. But wildfires are just the beginning. Much like a hurricane, flood, earthquake, mudslide or tsunami, the Camp Fire inflicted severe damage on a specific area, and research indicates that natural disasters like these are increasing in frequency and severity.

Want to continue reading?
Become a Free
PropertyCasualty360 Digital Reader.

INCLUDED IN A DIGITAL MEMBERSHIP:

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.

Already have an account?

 

PropertyCasualty360

Join PropertyCasualty360

Don’t miss crucial news and insights you need to make informed decisions for your P&C insurance business. Join PropertyCasualty360.com now!

  • Unlimited access to PropertyCasualty360.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including BenefitsPRO.com, ThinkAdvisor.com and Law.com
  • Exclusive discounts on PropertyCasualty360, National Underwriter, Claims and ALM events

Already have an account? Sign In Now
Join PropertyCasualty360

Copyright © 2023 ALM Global, LLC. All Rights Reserved.