Chile wildfires: Payouts for destroyed plantations hit US$100mn

About 175,000ha of the 200,000ha of planted forest in Chile destroyed during wildfires this year were covered by insurance, newspaper El Mercurio reported, citing local insurance association AACh.

Fires ripped through the country's central-southern regions in January and February. Overall, 500,000ha of land was affected, including farmland and populated areas. The government called the fires "the worst forest disaster" in Chile's history, and firefighters tackled some 4,000 individual blazes.

AACh estimates insurers have paid out nearly US$100mn in claims to forestry sector firms as well as vineyards,

However, the US$100mn works out to less than a third of total plantation losses initially registered by the forestry industry.

The company that sustained the biggest losses, US$240mn, is wood pulp firm Arauco. The figure corresponds to 80,000ha of destroyed plantations, or 40% of the 200,00ha total.

El Mercurio reported AACh president José Manuel Camposano as saying that there are opportunities to increase penetration as there is still land, including farmland, not insured.

He also cited climate change as an issue that needs studying.

"The [insurance] products or the solutions emerge from necessity, and a detailed look must be taken to see whether the climate really has changed," Camposano was quoted as saying.

He added that the loss adjustment process is now finished and, taken as a single catastrophe, the wildfires were not overly significant as the local P&C insurance industry pays out about US$3bn a year in claims.