(Bloomberg) -- The wildfires spreading around Canada’s oil-sands hub of Fort McMurray may become the costliest catastrophe in the country’s history with losses potentially reaching C$9.4 billion ($7.3 billion).

Insurance losses could reach that high if nearly all homes, cars, and businesses in the Fort McMurray area were destroyed and owners filed a claim to insurers, according to a research note to clients from Bank of Montreal analyst Tom MacKinnon. He said it’s more likely that one-quarter to half of assets would be damaged, leading to total insurance industry losses of C$2.6 billion to C$4.7 billion, as much as quadruple the costliest Canadian natural disaster.

The fires have forced the evacuation of a 88,000 people in northern Alberta, the largest in the province’s history, and scorched at least 100 square kilometers (40 square miles) in the region, home to oil and gas producers including Suncor Energy Inc. and Cnooc Ltd.’s Nexen. At least 1,600 homes and structures were damaged as of Wednesday, more than triple the number from the Slave Lake Fire in Alberta in 2011, previously the country’s most costly fire and third-most expensive catastrophe overall, according to Aon Plc.

‘Completely destroyed’

"Preliminary assessments indicated that entire neighborhoods were completely destroyed as well as pockets of the downtown area," according to a May 4 research note from a unit of the London-based risk consultant and insurance broker. Numerous businesses have also burned, although it is too early to calculate economic impact of insured losses given the fire is ongoing. "Once the fire was ignited and strong wind gusts arrived that tracked it into Fort McMurray, it set the stage for a major and devastating event."