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

Chubb

10/01/2025 11:43

Jan 10 (Reuters) - U.S. property and casualty insurance
stocks fell in premarket trading on Friday after wildfires
menacing Los Angeles killed at least 10 people and devoured
nearly 10,000 structures, with five fires burning into a third
night. 
    The Palisades Fire between Santa Monica and Malibu on the
city's western flank and the Eaton Fire in the east near
Pasadena already rank as the most destructive in Los Angeles
history. 
    Insurers are expected to face catastrophe-related claims
worth billions of dollars from the disaster, which analysts
estimate will be the costliest ever in California.
    "We expect insured losses to run well into the billions of
dollars, given the high value of homes and businesses in the
affected areas, and to cause large losses for P&C insurers with
significant homeowners and commercial property market share in
Los Angeles," Moody's Ratings said in a note. 
    Analysts at Mornginstar DBRS pegged insured losses in excess
of $8 billion, based on preliminary estimates. J.P. Morgan
expects the losses to reach as high as $10 billion. 
    Sector bellwether Travelers  TRV.N  fell 4% before the bell.
Mercury General slumped 32%, while Allstate  ALL.N , Chubb
 CB.N  and AIG  AIG.N  dropped between 4% and 6%. 
    European insurers also traded lower with Beazley  BEZG.L ,
Lancashire  LRE.L  and Hiscox  HSX.L  all down around 3%, the
three biggest losers across UK-listed large and midcaps.
 .FTLC .  
    The Pacific Palisades area is one of the most expensive
neighborhoods in the U.S., home to Hollywood A-Listers and
multimillion dollar mansions. Ahead of this week's disaster, its
insurance costs were among the most affordable in the country,
according to a Reuters analysis. 
    But that is likely to change after the scale of losses
anticipated in the wildfires now ringing Los Angeles, as well as
regulatory changes enacted late last year, four analysts told
Reuters earlier this week.
   

 (Reporting by Manya Saini in Bengaluru; Additional reporting by
Sruthi Shankar; Editing by Krishna Chandra Eluri)
 ((Manya.Saini@thomsonreuters.com; X: manya__saini;))