Jasper wildfire could cost insurance industry an estimated $700M

While the extent of the damage in Jasper is not yet fully understood, it's estimated about 30 per cent of the townsite may have been destroyed in this week's blaze.

The Jasper wildfire could cost the insurance industry up to $700 million, making it one of the most expensive wildfire disasters in Canadian history, DBRS Morningstar said Friday.

In a new report, the credit rating agency said it believes potential insured losses from this week’s disaster could come close to or even be higher than those incurred in the 2011 wildfire in Slave Lake, Alta., which — adjusted for inflation — reached about $700 million.

The only fire that topped that disaster was the 2016 wildfire in Fort McMurray, Alta., which resulted in inflation-adjusted insured losses of $4.4 billion and was the costliest wildfire in Canadian history.

While the extent of the damage in Jasper is not yet fully understood, it’s estimated about a third of the townsite, including at least one hotel, may have been destroyed in this week’s blaze. There are a total of 1,113 structures within the town.

“In addition, Jasper National Park is one of the most popular tourism destinations in Canada, which may cause insurers to face additional business claims in respect of commercial building and business interruption losses,” DBRS noted.

All critical infrastructure in the townsite was successfully protected, including the hospital, an emergency services building, schools, an activity centre and a wastewater treatment plant.

The Jasper fire is just one of many wildfires currently burning in Western Canada.

DBRS said it is still too early to predict whether the 2024 wildfire season will be comparable to 2023, which was the most active and destructive wildfire season on record with 165,000 square kilometres scorched.