could cost the insurance industry up to $700 million, making it one of the most expensive wildfire disasters in Canadian history, DBRS Morningstar said Friday.
In a new report, the credit rating agency said it believes potential insured losses from this week’s disaster could come close to or even be higher than those incurred in the 2011 wildfire in Slave Lake, Alta., which — adjusted for inflation — reached about $700 million.The only fire that topped that disaster was the 2016 wildfire in Fort McMurray, Alta., which resulted in inflation-adjusted insured losses of $4.4 billion and was the costliest wildfire in Canadian history.
All critical infrastructure in the townsite was successfully protected, including the hospital, an emergency services building, schools, an activity centre and a wastewater treatment plant.Story continues below advertisement DBRS said it is still too early to predict whether the 2024 wildfire season will be comparable to 2023, which was the most active and destructive wildfire season on record with 165,000 square kilometres scorched.While wildfires were not a major contributor to Canada’s insured natural catastrophe losses historically, they have become more of a concern since 2021, DBRS noted.
Canada experienced two large wildfires in 2021 and three in 2023, which represented about one-third of the insurance industry’s total $3.1 billion in severe weather-related losses in 2023.It said while the situation is serious, it expects the ongoing 2024 wildfire season to be manageable for Canada’s property and casualty insurers as long as no major urban areas are materially affected.