Lloyd’s Assesses Impact of Heat Waves and Wildfires

The recent series of wildfires that ravaged parts of Spain, France, Greece and Italy in late July may well be symptomatic of the warming trend in global weather patterns according to experts at Lloyd’s of London.

“Spain was worst hit with at least seven big fires in the south and east, destroying more land in a matter of days than in the whole of 2008,” an article on the Lloyd’s web site (www.lloyds.com) states. “Conditions were ripe following a prolonged heat wave with temperatures in the mid 40 degrees Celsius, [over 100° F] combined with strong winds that fuelled the fires and spread them over a wide area.”

12 people died in the fires, six of them firefighters. According to Guy Carpenter’s Instrat unit, “the insurance bill is likely to run to hundreds of millions of Euros.”

In addition Lloyd’s noted: “Southern Europe has seen an increase in such events in recent years and they are likely to become more commonplace in future.” The report cited the Intergovernmental Panel on Climate Change’s Fourth Assessment Report [www.ipcc.ch], which predicts that “climate change is projected to worsen conditions (high temperatures and drought) in a region already vulnerable to climate variability. Climate change is also projected to increase the health risks due to heat waves and the frequency of wildfires.”

Lloyd’s explained that “climate change primarily fuels wildfires by encouraging hotter drier conditions. While a number of the recent fires were a result of arson or burning by farmers, lightening is a common trigger and is expected to increase as a result of climate change. Seasonal changes are also thought to be significant, with longer summers and shorter winters. And hotter temperatures have a detrimental impact on ecosystems.”

Southern Europe is by no means the only region affected by rising temperatures and increased fire danger. Fires in California have proved increasingly destructive and expensive. “The most costly was the Oakland Hills wildfire in 1991, which cost $3 billon in inflation-adjusted insurance losses, according to A.M. Best. This is followed by the Witch Fire in 2007, which cost $1.4 billion and the Cedar Fire in 2003, which cost $1.35 billion,” said Lloyd’s.

In addition the article cites a group of US scientists led by California-Merced professor Anthony Westerling, who determined that “the incidence of large wildfires in the western US increased dramatically in the mid-1980s. The frequency from 1987 to 2003 was nearly four times the average from 1970 to 1986. The trend ‘is strongly associated with changes in spring snowmelt timing, which in turn is sensitive to changes in temperature,’ according to Westerling.”

Insurance exposures are growing as a result. Lloyd’s notes that from “an insurance perspective, the climatic factors – longer fire seasons, hotter summer temperatures, droughts, strong winds – are exacerbated by human development and the accumulation of hazardous fuels.”

The complete article is available on the Lloyd’s web site.

Source: Lloyd’s of London