Wildfires pose a complex risk that remains poorly understood, despite advancements in scientific modeling. Recent wildfires in Los Angeles have highlighted vulnerabilities, with over 14,000 structures affected. Analysts struggle to accurately predict risks influenced by climate change factors such as rising temperatures and changing landscapes. Even with human interventions like fire retardants, outcomes can vary widely. Insured losses from these disasters could reach up to $30 billion, reflecting a significant burden on the insurance industry, which has already covered $79 billion in wildfire losses globally over the past decade.
Wildfire risk is notoriously hard to predict due to various factors such as rising temperatures, vegetation differences, wind speeds, and human interventions affecting outcomes.
Moody's RMS Event Response estimates insured losses from the Los Angeles wildfires will range from $20 to $30 billion, adding to significant global payouts by insurers.
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