Towers of fire continue to accompany the massive wall of smoke caused by the blaze that has engulfed Alberta's city of Fort McMurray and surrounding forests. Around 1,600 buildings have already been destroyed and another 19,000 are estimated to be destroyed by the inferno.

While 88,000 residents of Fort McMurray were evacuated as the fire raged towards the city, residents expressed shock and grief over having lost their homes.

Based on the amount of destruction already incurred and what could happen, insurance companies may have to break the bank to cover costs that might easily rocket past Canadian $2bn (£1bn, $1.6bn).

Compared to the payouts given following the Slave Lake fire of 2011, which was around Canadian $700m, DBRS analyst Stewart McIlwraith told Reuters that this natural disaster would burn a bigger hole for insurers. "If you're looking at four times that of Slave Lake you're getting to well over C$2bn so there is a possibility that this may become the biggest catastrophic claim in Canada," he said.

The fire that started on 1 May has already torched close to 25,000 acres of property, and given that housing costs in Fort McMurray are much higher than the Slave Lake region – thanks to the prosperous oil sands boom in the area – insurance payments will also be sizeable.

Canada's largest property and casualty insurer, which has the biggest exposure in the region, have already recorded a drop in share value following the disaster. Other prominent insurance companies with exposure include Toronto-Dominion Bank, Aviva, RSA and Insurance Bureau of Canada.

Video of Alberta wildfire IBTimes UK