Los Angeles fires: loss estimates

Initial estimates of the losses caused by the Los Angeles fires vary widely from one source to another. For instance, analysts at J.P. Morgan believe that the fires that severely affected the Californian city of Los Angeles are likely to generate up to 20 billion in insured losses. For its part, Wells Fargo estimates that insurers could incur losses as high as 30 billion USD. This would make it the costliest wildfire in California's history.

American weather forecasting company AccuWeather, on the other hand, estimates economic damage between 250 and 275 billion USD, given that the affected areas, such as Pacific Palisades, Santa Monica and Malibu, are home to some of the most expensive residential buildings in the United States.

For Standard and Poor's, the insurance market's losses could range from 10 to 15 billion USD, a cost deemed manageable by insurers.

According to the rating agency, insurers are starting 2025 with healthy reserves, thanks to solid financial results in 2023 and 2024. Some of these insurance companies have also reduced their exposure to fire risk in California.