In this aerial view taken from a helicopter, burning homes are seen from above during the Palisades Fire near the Pacific Palisades neighborhood in Los Angeles, California on January 9, 2025.
Josh Edelson | AFP | Getty Images
Insurers exposed to California's homeowners market saw sharp selling on Friday as devastation from wildfires spread in Los Angeles.
shares Allstate It decreased by 6%, while Chubb and Travelers Both fell more than 3%. These three stocks were among the biggest losers in the S&P 500 on Friday. American International Group and progressive It fell more than 1%.
Allstate, Chubb and Travelers are the carriers with the highest insured losses in wildfires, according to JPMorgan. The Wall Street firm noted that Chubb could have particularly large exposure because of its focus on high net worth in the region.
Insurance stocks fall on Friday
This week's devastating fires could become the costliest in California history. Insurance losses from this week's fires could exceed $20 billion, and the estimate could be higher if the fires spread, JPMorgan estimated Thursday. Those losses would far exceed the $12.5 billion in insured damages from the 2018 Camp Fire, which was the costliest fire in the nation's history, according to data from Aon.
Moody's expected insurance losses to reach billions of dollars, given the high value of homes and businesses in the affected areas.
A man rides his bike through the rubble left by the Palisades Fire in the Pacific Palisades neighborhood of Los Angeles, Wednesday, January 8, 2025.
Damian Dovarganis | AP
The Palisades Fire is the largest of the five fires. It burned more than 17,000 acres and destroyed more than 1,000 buildings, according to California authorities. Pacific Palisades is an affluent area with a median home price of more than $3 million, according to JPMorgan.
Insurers have asked Southern California Edison to preserve evidence related to the devastating wildfires that tore through Los Angeles, according to a company filing with regulators.
Some reinsurance companies were also affected. Ark Capital Group and Renaissance Re Holdings It fell 2% and 1.5% on Friday, respectively. JP Morgan believes that higher loss estimates increase the likelihood of breaches of reinsurance obligations at various insurers.
— CNBC's Spencer Kimball contributed reporting.
