Wildfires that ravaged the area of Fort McMurray, Alberta, could be one of the costliest natural disasters in Canada’s history, with insured losses of at least $7 billion being likely, analysts said Friday.
The fires forced the evacuation of 88,000 people in northern Alberta, and at least 1,600 homes and structures were damaged or destroyed.
The area is home to oil and gas producers that Suncor Energy Inc. and CNOOC Ltd.’s Nexen, and the fires reportedly led to production shutdowns at multiple oil facilities north of Fort McMurray.
Tom MacKinnon, a Bank of Montreal analyst, said in a note that the fires are likely to result in $7 billion in insured losses.
While the Slave Lake, Alberta, fire in 2011 destroyed much of that town and had been the most expensive fire-related disaster in Canadian history with $680 million in insured losses, according to Aon Benfield Group Ltd.
Mr. MacKinnon said the Fort McMurray fire is nearly 10 times as large as the Slave Lake Fire.
In a media advisory, catastrophe modeler AIR Worldwide said it expects insured losses arising from the Alberta wildfires that broke out Sunday are likely to far exceed the Slave Lake fire.
AIR Worldwide noted that because of the oil industry, housing in the area is more expensive than its remoteness would suggest; in 2006, Fort McMurray had the highest real estate prices in Alberta.
That has resulted in a reduction in energy production, AIR Worldwide said.
Intact Financial Corp. and Aviva P.L.C., which are major insurers in Canada, reportedly were mobilizing claims teams.