Wildfires could be Canada’s ‘Katrina’
Insured losses from the ongoing wildfires around Fort McMurray, in Alberta, Canada, have been estimated at between $3.4 billion and $6.9 billion (C$9 billion) by catastrophe modelling firm AIR Worldwide.
And the disaster could have a bigger impact on Canada’s gross domestic product, on a relative basis, than the impact Hurricane Katrina had on the US economy in 2005. This is based on estimates from Imperial Capital.
AIR’s figures are in line with earlier estimates by Deustche Bank. The three largest local primary insurers have direct exposure that is limited to $170 million. While Intact Financial, Canada’s biggest property and casualty insurer, has said it will post insured losses of as much as C$1.1 billion ($850 million).
Reinsurers are braced to take a hit from a substantial level of claims. Last week, Jim Lynch, chief actuary at the New York-based Insurance Information Institute, told The Royal Gazette he expected insured losses to dent the second-quarter profits of insurers and reinsurers.
The city of Fort McMurray was evacuated as the flames threatened the community and surrounding ares. The wildfires started on May 1 and have continued to burn through the region.
Yesterday, the wildfires shifted back towards oil-sands installations north of Fort McMurray, forcing the evacuation of about 8,000 workers and prompting Suncor Energy to shut its main mine just as work was resuming.
The fires have grown to an area of 3,550 sq kilometres (1,370 sq miles), roughly the size of Rhode Island.