RMS Estimates Insured Losses of $100 Million to $150 Million for California Wildfire

Newark, Calif. – June 29, 2007 – Current estimates by Risk Management Solutions, the world’s largest provider of products and services for catastrophe risk management, suggest that insured losses from this week’s Angora fire near South Lake Tahoe will be between $100 million and $150 million. The wildfire, located in El Dorado County, California, has consumed approximately 3,100 acres and over 300 structures since Sunday, June 24.

As of Thursday night, favorable weather conditions have helped fire fighters to check the northeastward advance of the fire. With winds forecast to increase, the situation remains volatile. If the fire were to break through the defence lines and cross into South Lake Tahoe, insured losses could potentially reach a billion dollars; however the gains by fire fighting teams over the past 36 hours have significantly reduced the probability of this occurring.

“The Angora fire is the largest to have occurred in the Tahoe region in over four decades,” commented Don Windeler, director of wildfire risk modeling at RMS. “The area impacted has abundant surface fuel to burn, and a dry winter has only exacerbated the susceptibility to fire. RMS considers large areas of South Lake Tahoe adjacent to the fire as high to very high hazard.”

In May 2006, RMS released a suite of wildfire assessment tools that provide a robust and integrated solution to help the insurance industry reliably identify locations exposed to wildfire risk. The methodology incorporates the latest techniques in wildfire risk assessment using advanced fire behavior calculations to evaluate wildfire hazard, threat, and susceptibility in wildland, rural, and urban areas. The data considers varying weather conditions, annual frequencies of fire occurrence, surface fuel types, canopy cover, and topography, and is also the only data on the market to consider the likelihood of ignition in determining wildfire hazard.

RMS will continue to monitor this event and will update its loss estimates appropriately.