The latest estimates of the financial impact of the Fort McMurray Canadian wildfires suggest that the fires could cause up to C$10 billion in damages. Bernstein analyst Thomas Seidi took estimates made by leading Canadian property insurer Intact via satellite imagery and extrapolated the results of Intact’s estimates to the entire market.

Bernstein came up with a total market-wide loss estimate range of C$5.7 billion to C$10 billion.

“The only bottom-up figure we have so far is that 2,400 houses have been destroyed and at an average house price of C$500k, this results in estimated C$1.2b replacement costs, so the lower boundary of our C$5b range appears reasonably within reach, whereas the top end appears rather high,” Seidi added.

As if the fire itself weren’t enough of a wildcard for insurers, the price of oil is another big unknown that could have a huge impact on total losses. If oil prices rise before Canadian oil companies can get up and running again, their insurance losses will also rise.

Bernstein estimates…

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