The wildfires ravaging Los Angeles are estimated to result in up to $30 billion in insurance losses nearly a week after they began.
This revised figure, provided by analysts from Wells Fargo & Co. and Goldman Sachs Group Inc., exceeds the $20 billion damage estimate previously suggested by JPMorgan Chase & Co.
Home insurance providers are expected to bear the brunt of the costs. According to a Wells Fargo report, companies like Allstate Corp, Chubb Ltd, AIG, and Travelers Cos have been the most exposed. Other insurers, such as Mercury General Corp and Cincinnati Financial Corp, are vulnerable, though not included in the analysis.
Global insurers are also beginning to assess the scale of the damage. Japan’s Tokio Marine Holdings Inc. has expedited claims processing for affected individuals. However, President Satoru Komiya noted it is too early to determine the impact on business performance fully. According to Bloomberg Intelligence, Japanese insurers, including MS&AD Insurance Group Holdings Inc and Sompo Holdings Inc, are collectively exposed to about 3% of the insured damage.
The fires remain severe, with strong winds worsening conditions and hindering firefighting efforts. At least 24 people have died, and over 12,000 structures spanning 40,000 acres in areas like Pacific Palisades and Altadena have been destroyed.
Read: Los Angeles Battles Escalating Wildfires as Conditions Worsen
Goldman Sachs analysts now project insured losses between $10 billion and $30 billion, while the total damage, including uninsured losses, could reach $40 billion. The fires may also impact U.S. nonfarm payroll growth in January, reducing job gains by 15,000 to 25,000.
As of Monday, the Palisades and Eaton fires remain largely uncontrolled, with authorities continuing to contain the blazes.
