US property and casualty insurers slide as Los Angeles wildfire losses mount

Los Angeles: The wildfires raging in Los Angeles have turned deadly, claiming at least 10 lives and destroying nearly 10,000 structures. It’s a tough situation, with five fires still burning after three nights.

The Palisades Fire and the Eaton Fire are now the most destructive in the city’s history. Insurers are bracing for a massive wave of claims, with estimates suggesting losses could hit billions. Analysts are saying this could be the costliest disaster California has ever seen.

Moody’s Ratings mentioned that insured losses could run into the billions, especially given the high value of homes in the affected areas. Some estimates from Morningstar DBRS suggest losses could exceed $8 billion, while J.P. Morgan thinks it might reach $10 billion.

In the stock market, things aren’t looking good for insurers. Travelers dropped 4%, and Mercury General took a big hit at 32%. Other companies like Allstate and AIG also saw declines between 4% and 6%.

Even European insurers felt the pinch, with companies like Beazley and Hiscox down about 3%. The Pacific Palisades area, known for its pricey homes and celebrity residents, had relatively affordable insurance rates before this disaster. But that’s likely to change as the full extent of the losses becomes clear.

It’s a tough time for everyone involved, and the insurance landscape in California may never be the same after this.