AM Best, a global credit rating agency and data analytics provider specializing in the insurance industry, has warned that insured losses from the ongoing wildfires in Spokane, Washington, are expected to be considerable. In its latest commentary, titled "Insured Losses in Washington, Spokane-Area Wildfires Expected to be Sizable," the agency highlighted that individual insurers with concentrated portfolios in the affected areas are likely to be more negatively impacted than diversified peers.

The financial magnitude of these losses will largely depend on the specific coverage secured by homeowners and the level of protection obtained by business owners. AM Best noted that demand surge and ongoing inflationary pressures may further drive up insurance claims-related costs, adding complexity to the final loss estimates for carriers involved.

Scope of the Disaster

Three major wildfires, collectively referred to as the Complex Fire, have burned over 10,000 acres to date. The disaster has resulted in the destruction of more than 700 homes and forced the evacuation of approximately 65,000 people.

Market Impact Assessment

Despite the significant local damage, AM Best assessed that the losses do not appear to be in the same order of magnitude as the 2025 California wildfires. Consequently, the agency expects minimal impact on the current softening prices in the broader reinsurance market. However, there could be a reassessment in localized areas where reinsurers feel compelled to re-evaluate their risk models.

David Blades, Associate Director of Industry Research and Analytics at AM Best, stated that primary insurers with a concentration of their homeowners’ or commercial property portfolio in Washington state may re-examine their appetite for wildfire risk. He emphasized the unpredictability of such events regarding location, intensity, and seasonality as key factors driving this potential shift in underwriting strategy.