e-newsletter of the Institute for Catastrophic Loss Reduction Volume 6, Issue 1 First quarter 2012 ICLR Board of Directors The writing is on the wall for future wildfire Kathy Bardswick (Chair) The Co-operators risk in Canada Barbara Bellissimo State Farm ICLR launched its wildfire research Our surprise last year was Charmaine Dean program more than a decade ago. that a large loss was experienced in Western At that time the largest wildfire loss such a small community. The major Andy Hrymak for our industry was less than $10 wildfire losses for insurance Western million in claims paid, nevertheless companies in the United States and Paul Kovacs the Institute warned that it was Australia typically involve fire ICLR inevitable that our industry would burning into larger communities. But Sharon Ludlow experience a $1 billion loss event. Slave Lake had a population of Swiss Re Deborah Moor In 2003, the fire on the edge of 7,000. Indeed there are hundreds of Lloyd’s Canada Kelowna had the potential to grow communities like Slave Lake Brian Timney into a billion-dollar loss, but was put located near forests across Western out shortly after it came into the city. Canada. Many of these Last May a fire near Slave Lake communities have valuable grew into a $700 million loss when it commercial facilities for mining, destroyed one-third of the town. We forestry, oil production or tourism. remain convinced that our industry For example, several large fires will experience a $1 billion wildfire were burning last year near Fort loss event. Indeed such losses may McMurray where significant oil become regular events. production facilities are located. ► Inside this issue: Wildfire risk cont . 2 Reducing damage 3/5 to houses in storms Heatwaves 6/10 Swiss Re sigma on 10/11 natural catastrophes in 2011 The writing is on the wall for future wildfire risk in Canada cont ... 2 Russia, Brazil and Canada have the United States and Australia, risk.” the largest forests in the world, and should not be dismissed as The Canadian insurance and considerable experience with one-off events. industry has the rare opportunity wildfire. Each year thousands of ICLR concentrates its to approach the peril of wildfire Canadians are evacuated hazard research on four areas: much differently than it has because they are at risk from water, wind, earthquake and approached the hazards of water wildfire. Moreover, the research wildfire, and this is reflected in and wind, i.e. it has the chance to evidence is overwhelming that the organization’s five year essentially start ‘from the the forest area burned in Canada strategic plan, which was written beginning.’ will increase significantly over the and released prior to the Slave The industry can’t turn next few decades. Lake fire (see www.iclr.org). the clocks back and start again During Canada’s early Of wildfire, the plan on the underwriting of wind- history it was common that notes: “ICLR will…actively work related risk. And while it may uncontrolled fire in the forest to assess the growing risk of a wish it could do so with water would destroy urban centres. wildfire destroying an urban area losses, which have proven to Urban fires also spread into in Canada. Billion-dollar loss become a problem, too much of forests. Indeed some of the events have increased in that has flowed under the bridge. world’s largest fires on record frequency and severity in the However with just two were in Canada, including the United States, Australia and major wildfire losses on the Miramichi Fire in 1825. Over the Europe, and could strike in books in recent times and past eight or nine decades, Canada. The Institute will warnings of a future with more however, we have aggressively continue to work with the wildfire and larger wildfires in this been working to suppress fires. research community, the country, now is the time to really Indeed, 90% of fires in Canada Canadian Forest Service, consider the hazard, and are now put out soon after they provincial governments and endeavour to understand wildfire start, and many of the municipal leaders. In particular and the broader issues that uncontrolled fires are in remote we will seek to increase the inform wildfire risk, such as land/ areas where a decision is made awareness of the insurance forest management, the role of to allow them to burn. industry about the increasing risk and interplay between Canada’s success in of loss and make established governments of all levels, suppressing wildfires at risk of tools, like FireSmart , available to increasing development into the burning into cities comes at champion loss prevention. wildland/urban interface, and considerable expense. Some “Notwithstanding the climate change, among them. years governments across 2003 wildfire season in British If the industry fails to do Canada spend more than one Columbia, the Institute is of the so now, it could very well find billion dollars on wildland fire opinion that the Canadian itself in position ten or twenty suppression. The expectation of insurance industry may be too years out where stakeholders are more forest area burned will complacent about the potential sitting around a table talking require a doubling of spending on for a major wildfire loss in the not- about the wildfire insurance crisis fire suppression over the next few too-distant future. Hence, in Canada and what to do about decades to maintain the current whenever possible, ICLR works it. record of loss prevention. And to get messaging out that Wildfires and their this concern is growing at a time insurers need to consider the growing potential to devastate when governments seek to eventuality, first by becoming urban centres is an area of restore their fiscal health by aware of the risk and of growing concern. It is a risk that constraining spending. There is a vulnerable areas of the country has spread closer and closer to risk that the required funds will and, second, by including wildfire the urban interface in recent not be provided to maintain in pricing relevant risks…The years. current levels of protection. Institute is also working to spread These are some of the In these changing times it awareness within the insurance ideas that can be taken from the remains a challenge to get the industry of the Canadian Wildland recent ICLR workshop on wildfire. Canadian insurance industry’s Fire Strategy (CWFS) and the The Institute remains committed attention on wildfire risk. The important need to get funding for to work with our member insurers losses our industry experienced the plan as soon as possible, as and other partners to better in Kelowna and Slave Lake well as awareness with regard to understand and manage this should be viewed as a warning the availability of and need for threat. that we will soon need to manage better tools (including maps) to this risk as actively as insurers in monitor and assess wildland fire Reducing damage to houses in storms 3 An evaluation of the performance of roof sheathing By Gregory A. Kopp, Boundary Layer Wind Tunnel Laboratory, Faculty of Engineering, Western University Our post-storm damage building. It has been observed standards which may over- investigations have found that that the loss of a single sheet of estimate the capacity or under- roof systems are vulnerable to plywood, can allow so much estimate the load. The team of researchers at the University of Western Ontario’s Insurance Research Lab for Better Homes (IRLBH) recently conducted a detailed study to determine roof sheathing performance under wind loads experienced in severe wind storms. In order to assess the wind loads on roof sheathing, wind tunnel studies of more than 40 different houses were conducted at the Boundary Layer Wind Tunnel Laboratory (BLWTL). The key parameters Roof damage as the result of a tornado in water into the house that the effecting wind loads on houses Saskatchewan. structure becomes an insurance write-off. Thus, keeping all extreme winds. Residential, building components intact, even wood-framed houses appear to those which may not be critical be particularly vulnerable. Once a structurally, is important to component fails, it can become mitigating overall losses. wind-borne and impact a One of the challenges is downwind structure, which, if it that sheathing is often observed impacts a window or door, will to fail at wind speeds below those cause it to fail. This leads to they are to be designed for. internal pressurization, which can Several factors can contribute to cause further failures, particularly this under-performance, such as Photograph of the different nails used in to the roof components and (i) improper selection of the roof sheathing study. From left to structure. Failures of the building materials, (ii) improper right: twist-shank nail, HurriQuake® nail, envelope increase losses by installation, (iii) degradation of adhesive coated ring-shank nail, another allowing wind and rain into the materials due to aging or lack of ring-shank nail, and a staple. are the terrain and surroundings, number of storeys, roof shape, roof slope, and whether or not there is a large opening on the walls (caused by failure of a window or door). So, in our study we considered four different suburban neighbourhood housing patterns, houses with 1, 2 and 3 storeys, and the effects of gable and hip roofs with slopes varying from 4:12 to 12:12. To determine how well sheathing could withstand such loads, more than 200 full-scale tests of sheathing were conducted on a wide range of sheathing configurations. Sheathing failure caused by inadequate durability within the intended life These included examining the hold-down strength, likely missing nails or span, and (iv) potentially effects of different types of nails, deteriorated materials, in Vaughan, ► Ontario.