In a devastating scene captured from above by a helicopter, burned homes are visible amidst the Palisades fire near the Pacific Palisades neighborhood of Los Angeles, California on January 9, 2025.
Insurance companies with exposure to the California homeowners’ market saw a sharp decline in their stocks as the Los Angeles wildfires caused widespread destruction. Allstate, Chubb, and Travelers all experienced losses, with JPMorgan highlighting them as the most at risk carriers in the wildfires.
The recent fires in California are predicted to be the costliest in the state’s history, with insured losses potentially exceeding $20 billion. Moody’s Ratings anticipates losses running into the billions given the high value of homes and businesses in the affected areas.
The Palisades Fire, which has destroyed over 1,000 structures in an affluent area with a median home price of over $3 million, has garnered significant attention. Insurance companies have requested Southern California Edison to preserve evidence related to the wildfires.
Additionally, certain reinsurers like Arch Capital Group and RenaissanceRe Holdings were also impacted, with JPMorgan forecasting a breach in reinsurance attachments due to rising loss estimates.
Don’t miss these insights on the recent California wildfires and their impact on insurance companies and the reinsurance market.