AIR Worldwide Corporation has released its U.S. wildfire model, a probabilistic model designed to help insurers understand the location of their exposures and to estimate potential losses from wildfires. The model will help insurers, reinsurers, and intermediaries manage wildfire risk both for individual policies and entire portfolios of properties in California.
Nationally, wildfires have cost the insurance industry more than $5 billion since 1980 with a majority of the losses occurring in California, according to AIR. The 2003 wildfires in Southern California cost insurers more than $2 billion. Together, the fires burned more than 750,000 acres, destroyed 3,700 homes, and resulted in the deaths of 24 people.
"The growth in insured losses from wildfires is a result of the same broad demographic trend we've observed with respect to other perils–namely, increasing property development in high-risk areas," says Jayanta Guin, vice president of research and modeling at AIR. "In the case of wildfires, we are witnessing property growth in the buffer zone between wildlands and the urban environment. According to U.S. Fire Administration statistics, nearly 40 percent of new home development in the western United States is occurring in this wildland-urban interface, putting more insured property at risk every year."
Insured losses from wildfires are influenced by factors such as local fuels, topography, weather, and the vulnerability of affected structures. AIR's model employs high-resolution fuel (vegetation), topographic, and weather data. The model incorporates 13 burnable fuel types at 30-meter resolution accounting for variations in moisture content, fuel loading, and horizontal continuity. Since fire spread is influenced by topography, AIR has incorporated high-resolution USGS digital elevation data. The model also considers the effect of wind speed and direction, including the Santa Ana winds in Southern California and the Diablo winds in the northern part of the state.
The AIR model also estimates the mitigating impact of fire breaks created in the course of fire suppression activities as well as the exacerbating impact of impaired road access.
The flammability of roof and siding materials is the primary determinant of a structure's vulnerability to fire. The AIR model accounts for a wide range of residential and commercial constructions and takes into account mitigating factors, such as fire-resistant roofing and siding materials, to build an estimate of damage and loss.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.