Insurance Industry Faces $30 Billion Loss Due to LA Wildfire

The wildfires raging across the Los Angeles area continue to inflict massive damage, with home insurance providers expected to bear the brunt of the costs. According to the latest estimates from analysts at Wells Fargo and Goldman Sachs, the wildfires could result in losses of up to $30 billion for the insurance industry, significantly surpassing JPMorgan's earlier projection of $20 billion.

Wells Fargo has identified **Allstate Corp., Chubb Ltd., American International Group, and Travelers Cos. as the insurers likely to be most impacted.  

Bloomberg Industry Research analyst Steven Lam estimates that Tokio Marine, Japan's MS&AD Insurance Group Holdings and Sompo Holdings Inc. collectively account for approximately 3% of the insured losses from the California wildfires.  

Los Angeles is grappling with a second consecutive week of strong gusts, which have exacerbated the spread of the wildfires and hampered firefighting efforts. The blazes have devastated more than 40,000 acres of land in the Pacific Palisades and Altadena communities, resulting in at least 24 fatalities and the destruction of over 12,000 structures.  

Goldman Sachs analysts estimated in a report dated January 13 that insured losses range between $10 billion and $30 billion. When factoring in uninsured losses, the total damages could climb to around $40 billion. The report also noted that the fires are likely to dampen U.S. nonfarm payroll growth for January, reducing job gains by an estimated 15,000 to 25,000.