LA wildfires: 17,027 structures damaged or destroyed. Insured loss estimates avg $32.5bn

According to the latest official data from California fire authorities, the wildfires in the Los Angeles region have damaged or destroyed 17,027 structures so far, while the early insurance industry loss estimates from risk modellers average $32.5 billion.

Which would suggest an average insurance claim of around $1.9 million, although this would not leave any allowance for other claims vectors such as business interruption.

Analysts at investment bank Peel Hunt noted this morning that, “There is a risk that insured losses will increase further as the two main fires (Palisades and Eaton) are still not fully contained.”

With new red flag warnings for dangerous or extreme fire weather in place for the next few days, with officials cautioning of the risk of fires growing, there is a chance the damage increases further from these still burning fires.

It’s also worth noting that official data that now states 17,027 structures were damaged or destroyed by these two wildfires may rise whether the burns worsen or not, as the analysis of impacts continues at this time.

“It is still unclear what proportion of insured losses will be retained by insurers in the admitted market, how much exposure has been transferred to the E&S market in the past few years, and what will be picked up by the reinsurance industry,” Peel Hunt’s analyst team said.

Adding that, “Reinsurers have lowered their exposure to secondary perils such as wildfires since 2022. In addition, reinsurers increased their attachment points significantly in 2023 and there was no great reduction in these attachment points in 2024 or 2025.”

The analysts also highlighted, “The California FAIR Plan has c.US$2.5bn of reinsurance cover, leaving a net exposure of US$5.3bn. Stripping this from the midpoint of the catastrophe modelling agencies’ loss estimate leaves a private market insured loss of US$27.2bn. This is equivalent to a major Hurricane Milton type insured loss.”

Further stating, “The question is then how much of the exposure has been transferred to the E&S market and therefore could be picked up by Lloyd’s. Given the fact that terms and conditions, including attachment points, can be freely set inthe E&S market and pricing is unregulated would suggest that E&S insurers may be able to absorb these elevated wildfire losses and be retained within catastrophe budgets.”

Last week, CoreLogic became the first catastrophe risk modelling firm to issue a public loss estimate, with its analysis of residential and commercial exposures suggesting an industry loss estimate range of between $35 billion and $45 billion, which includes losses to the FAIR Plan.

This was followed by an initial estimate from Moody’s RMS Event Response, saying that private market and FAIR Plan insured losses to-date from the Los Angeles, California wildfires will likely fall in a range between $20 billion and $30 billion.

Which gives the average insurance industry loss estimate, at the mid-points, of $32.5 billion, from risk modeller sources, although that is lower than estimates from some other equity analyst teams.

Also read:

– LA wildfires: Moody’s RMS estimates insured losses to-date of $20bn to $30bn.

– LA wildfires: Gallagher Re estimates industry insured losses at $20bn to $30bn.

– LA wildfires: CoreLogic initial insured loss estimate is $35bn to $45bn.

– Alternative capital can provide wildfire capacity, but pricing a sticking point: Morningstar DBRS.

– Stone Ridge marks mutual cat bond / ILS funds the most on LA wildfires.

– Euler ILS Partners puts wildfire industry loss at $15bn-$17bn, highlights BI / ALE uncertainty.

– Wildfire losses may cause re/insurance pricing to firm as payback sought: Berenberg.

– BMS says LA wildfire insured losses likely to exceed $25bn. KBW analyses up to $40bn.

– Autonomous raises its LA wildfire loss estimate to $25bn, $18bn from Palisades fire.

– California wildfires: Subrogation topic raised, as utilities come into focus.

– ICEYE satellite analysis: Over 10,900 buildings likely destroyed in Palisades and Eaton fires.

– Catastrophe bond price movements due to LA wildfire exposure.

– Evercore ISI: LA wildfire insured loss $20bn-$25bn. Could be one event under reinsurance.

– LA wildfire losses to “notably exceed” $10bn, could approach $20bn: Gallagher Re.

– Mercury says LA wildfire losses to exceed reinsurance retention.

– LA fires: “Considerable attachment erosion” likely for some aggregate cat bonds – Steiger, Icosa.

– LA wildfires: Over 10k structures destroyed. Insured losses up to ~$20bn, economic $150bn.

– LA wildfire losses unlikely to significantly affect cat bond market: Twelve Capital.

– LA wildfires unlikely to cause meaningful catastrophe bond impact: Plenum Investments.

– JP Morgan analysts double LA wildfire insurance loss estimate to ~$20bn.

– LA wildfires: Analysts put insured losses in $6bn – $13bn range. Economic loss said $52bn+.

– LA wildfires bring aggregate cat bond attachment erosion into focus: Icosa Investments.