Los Angeles Wildfires Impact Insurance Stocks

The recent wildfires in Los Angeles, particularly the Palisades and Eaton fires, have caused significant devastation, destroying nearly 10,000 structures and consuming over 34,000 acres. As a result, U.S. property and casualty insurance stocks plummeted, with Mercury General seeing a 32% drop and Allstate, Chubb, and Travelers falling between 4% and 6%. JPMorgan has doubled its estimate of insured losses to over $20 billion, while other analysts predict losses could range from $8 billion to $17.5 billion, potentially making this disaster the costliest wildfire in U.S. history. Moody's warns that the ultimate costs will take weeks or months to fully assess, but they are expected to run into the billions due to the high value of properties in the affected areas. The situation is compounded by California's struggle to retain insurers amid increasing wildfire threats driven by climate change. The fallout has also affected European insurers, with several large companies experiencing stock declines.