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Ep. 2: When faced with fire: How climate change could affect Canada’s wildfire risk

The 2023 wildfire season has been record-breaking in a number of ways. On June 27, 2023, Canada exceeded its known historical record for total area burned by wildfire in a single season — shattering a statistic that has stood for 34 years.
Raging forest spring fires. Burning dry grass, reed along lake. Grass is burning in meadow. Ecological catastrophy. Fire and smoke destroy all life. Firefighters extinguish Big fire. Lot of smoke

The 2023 wildfire season has been record-breaking in a number of ways. On June 27, 2023, Canada exceeded its known historical record for total area burned by wildfire in a single season — shattering a statistic that has stood for 34 years. With months left to go in the 2023 season, Canada has already also surpassed the 10-year average for number of fires, as well as set a record for forced evacuations.

In our second episode of When faced with fire, a three part podcast series where we explore Canada’s wildfire risk, Ritch Seeley, a managing director within Marsh Advisory Canada, chats with George Fan, who is their lead consultant for natural catastrophe and climate risks, and Mirsada Jakupovic, one of Marsh’s senior insurance placement leaders for western Canada. They shed light on how climate change may affect the severity of wildfire season in years to come, as well as the potential insurance implications.

Stay tuned for our final episode, where we will discuss ways to improve your business resilience, and how you can minimize wildfire-associated disruptions.

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Key takeaways

Canada is warming at an alarming rate

Since 1948, the annual average temperature in Canada has increased at roughly twice the global average rate. Due to our higher latitudes, this phenomenon is even more prominent in the northern regions, where the annual mean temperature has risen by roughly three times the global average warming rate. These higher temperatures lead to warmer winters and longer wildfire seasons.

We can’t count on increased rainfall to tamp down wildfire risk

Although average precipitation is projected to increase with climate change, its effects will be uneven globally. With this in mind, wildfire risk is still expected to increase as global average temperatures rise. Additionally, once wildfire burns through an area, the charred and barren ground is less able to absorb water, leaving it more susceptible to flooding.

Heightened scrutiny from underwriters is expected

Insurers are aware of increasing wildfire risk and have already paid significant claims caused by the fires. We anticipate they will be taking steps to mitigate this exposure, which may include more restrictive underwriting, increases in pricing, moratoriums for new expanded business during wildfire season, and mandatory across the board deductibles.

About our speakers

George Fan

George Fan

Vice President, Senior Risk Consultant, Marsh Advisory

George Fan is a professional engineer and a senior risk consultant for Marsh Advisory Canada, where he is the lead consultant for natural catastrophe and climate risks. He has over eight years of experience in property loss prevention and flood resilience. To gain further expertise on these topics, George is currently pursuing a master’s degree in climate risk in his spare time.

Ritch Seeley

Ritch Seeley

C.E.T. Managing Director, Consulting Solutions, Marsh Advisory

Ritch is Marsh Advisory Canada’s western region practice leader, where he assists clients in developing customized risk management frameworks that facilitate the identification, assessment, and prioritization of critical property and operational risks. He has over 25 years of risk consulting experience, and he has written thought leadership papers and presented risk management workshops on a wide range of risk topics such as principles of risk management, risk identification techniques, managing contractors, and understanding fire suppression systems.

Mirsada Jakupovic

Mirsada Jakupovic

Senior Vice President, Global Placement Leader

Mirsada is Marsh’s Vancouver placement leader, and has over 18 years of insurance industry experience. She is accountable for leading a team of experienced brokers operating across different segments, industries and product lines. Utilizing her risk expertise, global portfolio experience, and deep understanding of industry challenges, she drives the development and implementation of placement strategies to provide solutions that meet diverse and complex client needs.

Resources

The Canadian Wildland Fire Information System (CWFIS) gives you insight into when and how a wildfire may be approaching your site by providing daily fire weather and fire behavior maps year-round.

FireSmart™ Canada helps you lessen your wildfire risk by offering resources that address common concerns about wildfire in the wildland urban interface.

FM Global provides reports and data sheets that can help you protect and prepare yourself against wildfire risk with recommendations on how to mitigate your exposure.

Although the National Fire Protection Association’s (NFPA) standards for wildland fire management are not publicly available, NFPA’s wildfire division offers many free resources, such as fact sheets and online trainings, which can help you reduce your risks of damage and loss due to wildfire.