US property and casualty insurance stocks fell in premarket trading today after wildfires continued to devour thousands of buildings in Los Angeles.
Insurers are expected to face catastrophe-related claims worth billions of dollars from the disaster, which analysts estimate will be the costliest ever in California.
“We expect insured losses to run well into the billions of dollars, given the high value of homes and businesses in the affected areas,” said credit rating firm Moody’s Ratings.
Analysts at JP Morgan expect the losses to reach as high as $10bn (£8.12bn) based on preliminary estimates.
A mandatory one-year moratorium preventing insurance companies from cancelling or non-renewing policies in wildfire-impacted areas has been issued by California’s insurance commissioner.
For context: The Pacific Palisades area is one of the most expensive neighbourhoods in the US, home to Hollywood A-listers and multimillion-dollar mansions.
Ahead of this week’s disaster, its insurance costs were among the most affordable in the country, according to a Reuters analysis.
But that is likely to change after the scale of losses anticipated in the wildfires, with more than 10,000 structures likely to have been destroyed.
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