Insurance industry losses from Los Angeles wildfires to be high but manageable, JPM says

Chubb

08/01/2025 16:47

** J.P. Morgan says the overall insurance industry losses from the Los Angeles wildfires are
likely to be high but manageable
    ** A wildfire raged across Los Angeles on Tuesday destroying numerous buildings and causing
jams as over 30,000 people were evacuated
    ** Brokerage says very preliminary estimates indicate insured losses from the fire could
approach $10 bln
    ** JPM expects the losses to be confined mostly to the homeowners' insurance businesses at
Allstate  ALL.N , Travelers  TRV.N  and Chubb  CB.BN  given they are the most exposed carriers
to the California homeowners' market 
    ** Adds that primary insurers are likely to incur more of the losses and reinsurers less,
mostly due to the increase in reinsurance attachment points since 2023
    ** Attachment point refers to the threshold at which an insurance policy begins to provide
coverage for a loss      
    ** Reinsurers in recent years have increasingly shifted the risk of catastrophe losses
toward primary insurers to reduce their loss burden    

 (Reporting by Arasu Kannagi Basil in Bengaluru)
 ((ArasuKannagi.Basil@thomsonreuters.com))