Maui Wildfires Portend Unprecedented Shift in What It Means To Mitigate Risk

The Maui wildfires portend a grand and incalculable reality for every single one of us living on this spinning blue globe we call Earth. Understanding the risks associated with where we live, work and play may be reaching a tipping point – one in which the full breadth of risk associated with living in Tornado Alley, building commercial space near fault line in Los Angeles, or building multifamily housing in coastal towns of South Carolina will require not just single threat assessments, but the need to assess multiple threats and how they may interact with one another.

Risk management involves identifying, analyzing and managing potential risks. Historical weather data allows for risk modelers to estimate impact and probability of the event. Accurate climate and weather data aids in understanding the probability and impact of weather-related risks. But what happened in Maui was a confluence of factors that the human mind was incapable of predicting or concluding was possible.

We are still learning more details about the factors that were at play in the Maui wildfire. What we do know is that the fire spread initially through highly combustible, non-native grass, the result of vegetation growth across abandoned farmland. Drought conditions were present. When you add Hurricane Dora’s high winds, Maui faced a tender box that needed only a single spark.

The Maui fire, fueled by hurricane force winds, was only one of three similar events where a hurricane is believed to have had a direct impact on a fire of this magnitude. In 2007, a tropical storm provided increased winds which spread fires in Florida. In 2017, a similar event was reported in Portugal and Spain, in which more than 30 people were killed. Such a confluence of factors have been rarely seen, so we are left to imagine what threats could impact the places where we reside and how a multitude of risk factors can interact with one another.

A clear failure of our collective imagination, Maui points to a not-so-distant future wherein risk managers, insurance brokers and insurers will have to somehow calculate for the multitude of threats present in high-risk areas, and even in areas we may (currently) understand as not so risky.

No Simple Answers

Both residential and commercial insurance industries are reeling from low capacity, continued growth in rates and even the outright abandonment of certain markets. Families in high-risk areas are facing the prospect of moving away from their beloved hometowns or facing any costs to rebuild on their own. Commercial property owners are seeing material impacts on dealmaking solely from the rising cost to insure properties. REITs are having serious conversations about portfolio allocation, working to mitigate exposures in high-risk regions.

There is no federal entity that maintains historical weather and hazard data for all 50 states. This creates exposure in the recording and maintenance of weather and risk events which should be considered in municipal planning, the development of building standards and retrofitting. The work to prepare ourselves for the realities of multifactorial risk mitigation in the age of global warming is upon us.

The Architectural Style Book of Lahaina – the historical town hit hardest by the Maui wildfire – published in 1969, details the need for this area to be constructed of materials consistent with the historical construction techniques of the early 19th century in Hawaii. The majority of the buildings present at the start of the wildfire were constructed with wood frames, built in close proximity to one another.

These elements totaled together point us to a conclusion that should make us all uneasy. Global warming and the sheer creativity of mother nature is slowly eating away at our ability to competently identify, plan for and mitigate risk – at least not in the ways we’ve done in the past.

The Maui wildfire is yet another clarion call for the reimaging and retrofitting of our understanding of risk and what it will take to address it in this age of our human existence.