The raw and often unstoppable power of nature has once again been demonstrated in the recent Australian wildfires but as the fires raged, the main focus seemed to be on arguments about their cause, rather than the cost in terms of human life and property.
To some it is an obvious sign of climate change, but with little or no acceptance that these fires occur naturally every year and are part of the way that the bush is controlled and regenerated.
Conversely, the climate change naysayers cite ‘do-gooder’ environmentalists preventing the bush being cut back to reduce the fire load, but in turn ignore the heatwave and drought that has extended this fire season and that fires have occurred in areas that have been managed.
Aside from the politics, fire has been synonymous with insurance since the 1666 Great Fire of London gave rise to the ‘modern’ insurance industry. Fire is frightening and seems to be the one risk that few will chance without insurance protection.
Fortunately, serious fires are a relative rarity but when they do occur, can be catastrophic. In recent years we have seen the devasting consequences of fires at Grenfell and Notre Dame, but it is difficult to comprehend the scale of the Australian fires which have affected a total area approaching the size of England – and one fire was described as the size of London.
What may be surprising is that wildfires are up there with earthquakes and hurricanes when it comes to natural disaster losses, albeit many wildfires are started by human activity, generally accidental, often negligent, but sometimes deliberate acts of arson.
Wildfires around the globe cost billions every year, but those in south west America and south east Australia are the most costly because the ‘wildland-urban interface’ is where the wild meets affluent urban areas.
The years 2017 and 2018 were particularly bad because of very large losses in California, including the costliest wildfire on record, The Camp Fire in November 2018, at almost $16.5 billion of which $12.5 billion was insured.
By comparison, current estimates for insured losses from the Australian fires are much lower than those from America but are still approaching $1 billion and could exceed the previous worst year of 2009.
Globally the trend certainly seems to be worsening, supporting the view from the climate change lobby, and in America there is some concern as to whether certain areas of California will become virtually uninsurable as they are so frequently affected.
This is less of a concern in Australia as it generally takes a few years before the bush can grow back sufficiently to become a risk again, but there is pressure on the authorities to encourage property construction to use more fire-resistant materials in future.
Aside from the financial cost and loss of human life in Australia, some of the other consequences are staggering.
Up to one billion animals are feared to have perished and areas that ‘don’t burn’ such as rainforests and peat swamps have been lost, possibly for good.
Regrettably insurance can only go so far.