The age of homes burnt, smoke damage, inflation and the California Fair Plan are variables in the losses from the Los Angeles wildfires, according to Tom Larsen of CoreLogic, which has released a $35bn to $45bn estimate of insured loss.
Losses
Property analytics firm CoreLogic has preliminarily estimated a residential and commercial insured loss for the Eaton and Palisades fires in Los Angeles of between $35bn and $45bn.
A Lloyd's market share of up to 10 percent of total insured losses from the Los Angeles wildfires would still enable the 2024 year of account – which is expected to account for the majority of syndicates' exposures – to maintain profitability, Alpha Insurance Analysts has said.
Expectations of a $30bn industry loss from the Los Angeles wildfires could mean Europe’s major reinsurers will have used up around a third of their 2025 natural catastrophe budgets in the first two weeks of the year, Citi research analyst James Shuck has warned.
Shares in Zurich, Scor and Conduit Re have been “oversold” in response to the devastating California wildfires, according to Berenberg, with all three firms highlighted as potential beneficiaries from expected catastrophe-driven rate hardening.
Morningstar DBRS has forecast a $30bn insured loss from the ongoing Los Angeles wildfires, with the credit rating agency warning that there is no immediate solution to the challenges in California’s property insurance market.
BMS senior vice president and senior meteorologist Andrew Siffert expects insured losses from the LA wildfires to exceed $25bn, but said it remains too early to provide a credible estimate given that the event is ongoing.
Liability carriers have potentially sidestepped a possible heavy claim following Southern California Edison’s (SCE) decision in 2023 to self-insure rather than buy commercial coverage.
Argenta Private Capital has said losses from the ongoing California wildfires will likely fall within loss budgets for Lloyd's syndicates, but warned of the potential for asymmetrical distribution of exposures, which could see some syndicates more heavily impacted.
Wells Fargo has increased its base case assumption for insured losses associated with the ongoing California wildfires to $30bn, which it said would translate to a 1.6 percent average hit to equity for its coverage.
