catastrophe losses

Catastrophe risk modelling specialist Karen Clark & Company (KCC) estimates that the insured loss (from privately insured and FAIR plan policies) to residential, commercial, and industrial properties, and autos from both the Palisades and Eaton wildfires in Los Angeles will sit close to $28 billion.

The CEO of the American Property Casualty Insurance Association (APCIA) has joined the calls on the California legislature to issue catastrophe bonds in order to recapitalise and stabilise the FAIR Plan in the wake of the damaging wildfire losses of recent weeks.

In a new update on the Los Angeles and Southern California wildfires, Evercore ISI analysts have said they believe that losses from the event are unlikely to change the trajectory of reinsurance pricing, which the firm anticipates will still be down 10% to 20% at the mid-year renewals.

Verisk’s Extreme Event Solutions division estimates that the insured industry losses to property from both the Palisades and Eaton fires in Los Angeles, will fall between $28 billion and $35 billion, driven primarily by losses to residential risks.

Greg Case, CEO and Andy Marcell, CEO of Risk Capital at insurance and reinsurance broker Aon, have highlighted that innovation and new alternative  sources of capital are required to protect communities and assets, in bridging the gap between economic and insured catastrophe and climate losses.

According to reinsurance broker Gallagher Re, 2024 saw natural catastrophes and severe weather driving an estimated $154 billion of losses to the private and public insurance markets, leading the company to suggest a new normal of $150 billion of annual catastrophe losses is approaching.

On Friday some catastrophe bonds saw further negative secondary market price movements due to potential exposure to aggregate attachment erosion, or actual losses, from the Los Angeles and Southern California wildfires. Here we detail the latest information we have on names that experienced the most meaningful moves in the last week.

Mercury General Corporation, one insurance company with meaningful exposure to claims from the Los Angeles, California wildfires, has said today that it has not yet determined whether it will consider the fires as two separate events under its reinsurance arrangements.

Analysis by catastrophe bond fund manager Plenum Investments suggests that the cat bond market is implying a roughly $30 billion industry loss from the Los Angeles, California wildfires, while also reporting that the Swiss Re Cat Bond Total Return Index fell -0.27% for the last week.

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.