Wildfires: More Frequent, More Severe, More Costly

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June 1, 2022


Among the many impacts of climate change, one of the most dramatic is the rapid increase in wildfires. Wildfires have moved beyond a seasonal threat to a year-round peril in many areas. Several serious wildfires have already started this year — way ahead of the usual peak period.

Steve Bowen, managing director, meteorologist and head of Catastrophe Insight at Aon, explains that this year’s wildfire risks aren’t limited to a single region of the U.S. “It’s been quite active from the Southwest to the Plains to parts of the Southeast, including Florida. And that’s concerning since we really haven’t gotten into California’s peak season yet, which typically starts in the summer and goes through the fall.”

The recent increase in wildfires isn’t unique to the U.S. — prolonged drought conditions over the past 15 years have brought numerous severe wildfires to Canada as well. Last year saw huge swaths of Europe — including the Balkans, Italy and the south-eastern Mediterranean — hit by record-breaking wildfires.

As climate change makes conditions more favorable for wildfires, the risk to life and property grows as development continues to increase in exposed regions. “It’s important to note that while the conditions are becoming more favorable and conducive for these larger and faster-spreading fires, we continue to see more people moving into these known high-risk areas,” says Bowen.

The increased risk and impact of wildfires around the world and throughout the year mean that the private and public sectors will need to make informed decisions around protection and mitigation.

In Depth

Aon’s 2021 Weather, Climate and Catastrophe Insight report notes that before 2015, the world had seen just four years in which aggregate wildfire-related insured losses topped $2 billion. That’s changed dramatically: 2021 was the seventh consecutive year insured wildfire losses topped that figure.

Among the most destructive fires of 2021, the Dixie and Caldor fires in California resulted in more than $2 billion in combined insured losses. December 2021’s Marshall Fire in Colorado, the most damaging in the state’s history, resulted in more than $2 billion in insured losses.

Extreme heat also caused numerous fires in British Columbia, Canada in 2021, while high temperatures and drought contributed to blazes in areas of the Mediterranean region, Siberia and Australia.

Though globally, many regions are increasingly prone to wildfires, California remains at high risk. The state has experienced billions in wildfire losses in the last several years, with many of the costliest disasters occurring since 2015.

Adding to the risks of rising temperatures, rainy seasons are getting shorter in areas like California and the western U.S. and extending fire seasons longer into the year. Those changes led the California Department of Forestry and Fire Protection to declare that the term “fire season” is outdated, as the wildfire risk now exists throughout the year.

“Wildfire is definitely a peril where we have a high level of confidence in the climate change impact,” says Bowen. “Changes in fire behavior are already being seen today, and they’re going to become more pronounced in the future.”

Wildfire Risk Spreads

As the climate changes, the wildfire peril is spreading to areas that previously might not have been considered at risk. In the U.S., recent analysis showed that one in six Americans are currently exposed to wildfire risks. Within 30 years, the percentage will grow to 21 percent, with nearly half of those exposed to wildfires living in the South.

“Let’s put this into perspective. We saw a major wildfire in Colorado on New Year’s Eve in 2021 — one of the costliest fires on record, regardless of location, anywhere in the world,” says Bowen. “We’ve also seen big events in places east of the U.S. Rockies, such as in Tennessee near Gatlinburg. We’re always very concerned about the potential for a prolonged drought in the Carolinas or anywhere in Appalachia.”

A combination of dry conditions and a major wind event along with a source of ignition can lead to a major fire in any area. “If there is more climate influence on weather behavior, there could be conditions that could lead to large conflagrations outside of the West,” Bowen says.

A Long-Distance Threat

Wildfires could also have an impact on businesses and individuals far from the fires themselves. For example, smoke traveling great distances can create health issues in other areas. Business interruptions and damages due to wildfires can also lead to supply chain disruptions for businesses elsewhere.

“I’m sure all of us can think of instances where it’s been a really hazy day or it smelled smoky. And then you find out that this is coming from a fire that’s thousands of miles away,” says Bowen. “This is having a real impact on day-to-day general health, and especially on the most vulnerable.”

Planning to Reduce Losses

Careful construction considerations, government action and safe forestry practices can all help to lower the potential damage of wildfires.

Fire-resistant materials can prevent a building from burning or slow the speed at which it burns, allowing firefighters more time to arrive at the scene. Keeping bushes or shrubs away from buildings can eliminate a source of fuel and allowing more distance between buildings can make it more difficult for fires to spread by embers blowing from roof to roof.

Developing and enforcing building codes aimed at addressing wildfire risks can also reduce the threat to lives and property. Infrastructure improvements — such as providing more roads for emergency service providers to enter a fire-stricken area and more ways for residents to evacuate — can offer critical help as well. And forest management efforts such as prescribed burns and clearing brush can eliminate potential fuel for wildfires.

How Technology Can Help

While technology can’t predict the ignition location of a wildfire, forecasting tools can determine where conditions are right for fires to occur, how quickly they might grow and where they might spread.

“We’re not necessarily forecasting specific locations where we’re expecting there to be a fire,” says Bowen. “We’re basically highlighting areas where conditions are most favorable for fires to rapidly spread should there be a fire that actually does get ignited.”

Forecasting the speed and direction of a fire has become more challenging, as the behavior of wildfires has changed. Now, some fires are hot enough to create their own weather patterns.

“When that happens, you can get really fast shifting fires within that environment that may be different than what people expect,” says Bowen. “So, it’s very, very, very hard to pinpoint specifically where a fire is going to happen, but we can certainly help people get a better sense of conditionally what days may be higher risk than others.”

A Collective Challenge

As wildfires become increasingly common and more intense, they threaten individual wellbeing as well as the interconnected operations of the business world.

“Just because an event hasn’t directly affected you where you live, it doesn’t mean that you’re not going to be affected by it in some way,” says Bowen. “Whether it’s your health, whether it’s an impact to the global supply chain, whether it’s increased costs at the store — in some way, shape or form, we’re all being affected by these increasingly impactful disasters, regardless of where they’re occurring.”