By: Luke Jones, Published on September 30, 2016 09:59 PM, Last Update on October 4, 2016 09:07 AM
Fort McMurray cost the insurance industry in Canada more than $4.5 billion when a wildfire swept through the Albertan town and claimed nearly 3,000 properties. However, while it was the largest insurance loss in Canadian history, insurers are being warned that Fort McMurray was just the start. Climate change through global warning will increase forest fires in the country by 50% before the end of the century.
That’s according to a new report from Natural Resources Canada. The report was released last week and warns that even the Fort McMurray wildfire will be surpassed in terms of size, damage, and cost to the insurance industry.
The May wildfire dubbed the Beast covered 590,000 hectares, but climate change will see that number broken in the coming years. Indeed, the area of forest burned by fires each year will double by the start of the next century.
“Climate change is gradually imposing an increasing trend on forest fires, a trend that is partially masked by the large variability of this disturbance,” says the report.
In 2015, there were 7,068 forest fires in Canada, a slight increase on the 10 year average. However, it seems fires are spreading more because the area burned by those 7,068 blazes was 50% higher.
“We don’t want to say necessarily the sky is falling, but it should motivate some concern and activity,” Taylor said of the report.
The interesting this is that Canada is slowly waking up to the fact that many areas of development are in unsafe areas. Government and private real estate construction companies must start to plan for a future of increased weather events by not building in noted danger zones.
Insurance companies will continue to take the brunt of any future Fort McMurray-like events. It has already emerged that many smaller carriers almost went out of business because of the May disaster. Any more similar events could cause huge problems for the industry.