The wildfire that continues to devastate the Canadian city is expected to be the most expensive in the country’s history.
The Fort McMurray insurance losses resulting from the devastating wildfire that has burned its way through the city in the Canadian province of Alberta is expected to bring about the largest insured property losses the country has ever experienced from a single disaster.
In fact, one analyst has estimated that the insured losses could come to a massive total as high as CAD$9.3 billion.
The Fort McMurray insurance losses are the result of the estimated 1,600 homes, small businesses and other structures that have already been entirely demolished by the raging inferno. The $9.3 billion (US$7.2 billion) estimate was generated by Tom MacKinnon, an analyst from BMO Capital Markets. He released a report in which he also stated that a “more reasonable” estimate of the losses from the Fort McMurray wildfire would be within the range of CAD$2.6 billion to $4.7 billion (US$2.01 billion to $3.64 billion), which would be accurate if between 25 and 50 percent of all housing units in the city were destroyed.
Even conservatively, the Fort McMurray insurance losses are greater than any other single disaster in Canadian history.
MacKinnon explained that even if the most conservative insurance loss estimates were applied, the cost that will be linked with this catastrophe will likely be, “by far the largest potential catastrophe loss in Canadian history.”
It would easily be greater than other recent disasters within the province. In 2011, the Slave Lake fire brought about losses to the insurance industry that reached $742 million. Two years later, the 2013 floods that swamped many parts of southern Alberta, including large segments of the city of Calgary, brought about $3.2 billion in insured damages. It is that latter catastrophe that currently holds the record as the most costly in the history of the country.
It is important to note that the initial estimates for the Fort McMurray insurance losses are likely to be quite low, as is typically the trend when trying to gauge the expense of such events. This could potentially mean that the final total may be at the higher side of the range presented by MacKinnon.
