(Bloomberg) — The cost of wildfires ravaging swaths of Los Angeles keeps rising, with new estimates of the total losses for the insurance industry now seen as high as $40 billion.
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The fresh figure Tuesday from Keefe Bruyette & Woods analysts is double their rough initial estimate from just a day earlier. In a note to clients, they cited “continuing upside insured loss potential” as the fires across the region remain largely uncontrolled. Their most optimistic scenario implies insured losses of $25 billion.
Los Angeles is bracing for increased fire risk through at least Wednesday as hot, dry winds pummel the area. After raging for a week, the blazes killed at least 24 people and incinerated entire neighborhoods.
The containment of the Palisades and Eaton fires, which unleashed the most devastation over the past week, stood at 17% and 35%, respectively, as of Tuesday, according to California’s Department of Forestry and Fire Protection.
Allstate Corp., Travelers Cos. and Chubb Ltd. are the firms that could face the most gross primary losses from the fires, according to the KBW analysts.
However, insurers for high-net-worth homeowners such as Chubb, American International Group Inc. and Cincinnati Financial Corp., may have higher exposure than their statewide market share would suggest, the analysts wrote.
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