US P&C Insurance: Losses From California Fires Look Large but Manageable

Loss estimates from the fires in the Los Angeles area appear to be increasing. Morningstar DBRS previously estimated over $8 billion in insured losses, but we have seen larger estimates rolling in as the fires have remained largely uncontained. Early loss estimates from natural disasters are often imprecise, but it seems clear that this will be a meaningful loss event for the industry. Still, it appears losses will be manageable and will fall short of the losses the industry sees from large hurricanes. For context, Hurricane Katrina led to about $100 billion in insured losses in today’s dollars, according to Aon.