Los Angeles County in California is seeing huge wildfires and firefighters are struggling to contain it. While it is too early to predict the estimated losses, analysts are predicting economic losses over USD 50 billion and insured losses anywhere between USD 6 billion and USD 20 billion.
How much impact will it have on traditional reinsurance market, ILS and retrocession market is to be seen. Impact on event excess of loss covers and aggregate excess of loss covers is also difficult to estimate now. Has there been any learnings from previous wildfires and whether the event definition has been tightened so as not to have any disputes on number of events is also to be seen.
I was trying to recall whether in my 35 years with non-life industry, whether I had an opportunity to settle any wildfire claims? The only claims that I can recall were the damage to stocks of bamboo in forests belonging to a Paper manufacturer under the forest fire extension. These were small risk losses, never had a chance to see an event loss due to forest fires.
And I said -“THANK GOD”, India has never seen major forest fires.
Immediately, I realized, should I thank GOD? GOD has given INDIA huge areas of large dense forests. It is we Indians who have cut these forests to such an extent that we are not left with any dense forest anywhere in India.
So, we need to thank Man-not GOD for not having such forest fires and the consequent pollution in large areas.
I was also reminded of school social studies where we were taught that “India is poor because of its huge population and hence we need to control population”.
Today, we are told that India is one of the fastest growing economies and will continue for the next two decades due to its large young population- Demographic dividend.
In School, we were taught that drinking clean water is good for health. Our parents never bothered where we drank water from-they had no objection even if we drank at railway stations.
Today, we are told that we are protected from many viruses and bacteria due our immunity levels being high due to the not so clean water, food and environment we faced in childhood. We see less of auto-immune diseases in India compared to the developed world.
Forests are good for ecology – Is it fact or opinion?
Large population is bad for economy -Is it fact or opinion?
Drinking clean water in childhood is good for health-is it fact or opinion?
No Idea.
Blog by Atmaram Cheruvu
