Hot on the heels of an estimate that the raging wildfires in California have caused $1 billion of insured losses, another leading provider of services for catastrophe risk management Risk Management Solutions has raised the upper expectation of total insured loss to $1.6 billion.

At least 20 major fires have been burning across Southern California, from Santa Barbara to San Diego, and some of the state's affluent and exclusive communities such as Malibu.

RMS believes the cost to insurers is now likely to be between $900 million and $1.6 billion, making the fires among the most expensive in the region's history.

The Newark, California-based company said: "If the wildfires continue to spread in this ongoing situation, losses are expected to reach or even exceed the higher end of this estimate. Of the 23 fires, the Witch Fire in San Diego has caused the most property damage so far and is likely to result in insured losses of $600 million to $1 billion."

Since last sunday the fires have burned over 465,000 acres of land and destroyed more than 1,600 structures with a further 27,000 buildings under threat, and more than half-a-million people forced from their homes, making it the largest ever evacuation in California and the biggest in the US since Katrina.

"For many of the fires, the emergency services have either gained control or set up defences around the main urban areas, and conditions are becoming more favorable. But several large fires are still largely uncontained and have the potential to cause severe property loss," said Don Windeler, director of model management at RMS.

The wildfires were made worse by an explosive combination of unusually strong Santa Ana winds and abundant dry 'fuel' such as scrub and brush.

According to RMS estimated insured losses from these wildfires would make them among the costliest in Californian history. The Oakland Hills fires in 1991 remain the most expensive, with insurance claims totaling between $3 and $4 billion in today's values. In October 2003, an outbreak of wildfires that struck similar areas in San Diego and throughout Southern California caused $2 billion to $2.5 billion in losses.

Primary personal lines insurers and specialty writers for high-value properties are expected to incur most of the claims from these wildfires.

"In recent years there has been significant development in the wildlands that border urban areas, as people seek to live in a more natural environment. As a result, more properties are at risk from brushfires which pose a high hazard in these areas," said Mr. Windeler.