Burned by wildfire losses, insurance industry rethinks risks

(Reuters News, 22 Jan 2020) Maintaining coverage as wildfires grow fiercer and more frequent will require lowering risks and finding new ways to fund policies for the most vulnerable, insurers say.

When forest fires swept into the Canadian city of Fort McMurray four years ago, a hurried evacuation of more than 80,000 people and the loss of thousands of homes and other buildings made the $10-billion disaster the costliest in Canada's history.

But when stunned residents set out to rebuild the northern Alberta city, insurers tried to make sure the huge losses - $6 billion of which were uninsured - would not happen again.

Most allowed clients whose homes were destroyed to take a cash settlement and rebuild in a safer place instead of replacing fire-vulnerable homes near forests around the city.

More than a quarter of families took up that offer, said Tara Laidman, associate vice president at The Co-operators, a Canadian insurance firm providing policies in the city.

Other families, using replacement-cost policies, rebuilt with fire-resistant roofs, fewer wooden decks and other changes designed to cut fire risk, insurers said.

"Fort McMurray is now a much more resilient community, built back better," said Laidman at an Organisation for Economic Co-operation and Development (OECD) meeting in Paris this month that discussed how to tame wildfire threats.

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Reuters News, 22 Jan 2020: Burned by wildfire losses, insurance industry rethinks risks