JPMorgan estimates that insured losses from the California wildfires could exceed $20 billion
San Diego County Supervisor Jim Desmond discusses the impact of California’s policies on residents amid raging wildfires.
A new analysis by JPMorgan estimates that total economic losses and insured losses are caused deadly forest fires the impact on Southern California is likely to be the costliest in the state’s history.
Insurance analysts at JPMorgan released a report Thursday looking at the exposure of homeowner and commercial property lines in light of the wildfires that have devastated communities in Los Angeles area, including Pacific Palisades and Altadena. At least five people died in the fires, and more than 2,000 homes, businesses and other buildings were damaged or destroyed.
The report said the fire had burned nearly 30,000 hectares, and nearly 15,000 homes and buildings were believed to be under threat as of Thursday – up from 13,000 on Wednesday morning. Firefighters struggled to contain the blazes, fueled by strong Santa Ana winds.
“Economic loss expectations from the wildfires have more than doubled since yesterday to close to $50 billion, and we estimate that insured losses from the event could top $20 billion (and even more if the fires go unchecked),” wrote JPMorgan analysts. . . “This would make this event significantly more severe than the 2018 Butte County Campfire, the wildfires with the largest insured loss in California history (with approximately $10 billion in insured losses).”
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Khaled Fouad, left, and Mimi Laine inspect a family member’s property destroyed by the Eaton fire in Altadena, Calif., on Thursday. (Justin Sullivan/Getty Images/Getty Images)
“Insured losses in the Butte Camp Fire were close to two-thirds of economic losses (about $15 billion). The event affected more than 150,000 acres and more than 18,000 homes/buildings,” the report said.
The 2018 Camp Fire devastated the town of Paradise and several nearby communities and caused 85 deaths. It was caused by a downed power line during strong winds.
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Apartments seen in flames from the Eaton Fire in Altadena, California. (Jon Putman/Anadolu via Getty Images/Getty Images)
The JPMorgan report states that the majority of claims and insured losses in the Camp Fire came from personal property losses, which accounted for 86% of losses compared to 12% for commercial property and 2% from all other lines and auto insurance.
Forest fires that last in Southern California affect larger population centers than the Camp Fire did, and JPMorgan analysts expect insured losses to be higher as a result.
An Altadena, Calif., resident walks away from his burning home in the Eaton fire. (Jon Putman/Anadolu via Getty Images/Getty Images)
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“While the current wildfires have not affected as much land or as many homes/buildings (so far), more damage is concentrated in the affluent Pacific Palisades area, which has high-value residential homes (median home price >$3M vs. <$500K in Butte County)," the analysts wrote.
“Furthermore, the fires are so far not contained and continue to spread, implying that estimates of potential economic and insured losses are likely to increase.”
