In this aerial photo taken from a helicopter, the Kenneth Fire (bottom) approaches homes while the back side of the Palisade Fire (top) continues to burn in Los Angeles County, California, on January 9, 2025.
Josh Edelson | AFP | Getty Images
Insurers exposed to the California homeowners market sold off heavily on Friday as damage from the Los Angeles wildfires escalated.
shares of allstate and Chub Both fell 4% in morning trading. A.I.G. and traveler Each fell about 2%. These four stocks were among the biggest losers on the S&P 500 index Friday morning.
Allstate, Chubb and Travelers are the airlines most affected by insurance losses from the wildfires, according to JPMorgan. The Wall Street firm said Chubb could have particularly high exposure because of its focus on the region’s wealthy population.
Insurance company stocks fell on Friday.
This week’s massive fires could be the most destructive in California’s history. JPMorgan estimated Thursday that insured losses from this week’s fires could exceed $20 billion, with higher estimates possible if the fires spread. These losses would far exceed the $12.5 billion in insured losses from the 2018 Camp Fire, the costliest fire in U.S. history, according to Aon data.
Moody’s Ratings expected insured losses to reach billions of dollars, given the high value of homes and businesses in the affected areas.
The Palisades Fire is the largest of the five fires. More than 17,000 acres have been burned and more than 1,000 structures destroyed, California officials said. The Pacific Palisades is an affluent area with a median home price of more than $3 million, according to JPMorgan.
The insurer has asked Southern California Edison to preserve evidence related to the devastating wildfires that hit Los Angeles, according to regulatory filings.
Some reinsurance companies were also affected. arch capital group and Renaissance Re Holdings They fell 2% and 1.5%, respectively, on Friday. JPMorgan believes that rising loss estimates increase the likelihood that reinsurance agreements with various insurance companies will be breached.
—CNBC’s Spencer Kimball contributed reporting.
