California wildfires destroyed expensive fine art housed in museums and multimillion dollar mansions, causing a leading insurer to focus on broader losses beyond property values during an insurance forum discussion, today.

Stephen Catlin, Convex Insurance cofounder and executive chairman, was a panellist at the Bermuda Risk Summit at the Hamilton Princess & Beach Club.

He said that cultural losses caused by this year’s devastating wildfires should not be considered secondary.

“A catastrophe is a catastrophe, full stop,” said Mr Catlin. “One aspect of the wildfires that has not been discussed yet, is how much fine art was lost.”

According to the Los Angeles Conservancy, more than 30 culturally and historically significant properties were destroyed in the disaster, along with more than 30 significant works by American visual art icon, Andy Warhol.

“It is clear that climate change is having an effect globally on fire and flood around the world,” Mr Catlin said. “It would be sensible to think about these types of losses as being of substance and something that is going to occur again and again.”

He said it was common in wealthy areas of Los Angeles for a property to be worth 10 per cent of the contents.

“It is not clear how much of that content was insured, or by whom,” Mr Catlin said.

During the question and answer portion of the panel discussion, California Insurance Commissioner Ricardo Lara thanked panellists for the discussion and said his office had finally passed wildfire risk modelling regulations.

“For the first time, our department in California will be able to use catastrophe modelling to understand this risk, as you all have been doing for years,” Mr Lara said.

The wildfires around Los Angeles in January caused an estimated $250 billion in damage.

Panellist Christian Dunleavy, group president and chief executive at Aspen, wanted to talk with Mr Lara about the gap in earthquake protection.

“I worry about the uninsured earthquake risk in California among homeowners,” Mr Dunleavy said. “The take up rate is so low.”

He said people tended to focus on what had happened recently, such as the wildfires.

“Obviously, fire is a huge risk and the fires are just truly devastating,” Mr Dunleavy said. “They destroy everything. However, as an industry, we would like to work with California on earthquake risk also. There has got to be ways to get more coverage for earthquake risk within the state.”

He saw earthquakes as potentially a huge problem in the future.

As the most populated state in the US, California experiences around 73 earthquakes per year, with an earthquake hitting roughly every five days, according to The California Earthquake Report.

A 2019 article published in Natural Hazards Earth System Science journal, attributed the low rate of insurance sign-on for earthquake coverage to the high cost, not the lack of perceived risk.

Mr Lara is one of five American state insurance commissioners here for the Bermuda Risk Summit. He will be speaking as a panellist tomorrow and the event concludes on Wednesday.