Shares in Several Insurance Companies Plunge on LA Wildfires
Shares in several insurance companies fell in early US trading as investors assessed the financial fallout from the deadly Los Angeles wildfires. The damage and economic losses from the fires have been estimated at $135-150 billion, signaling a long recovery and a spike in homeowners’ insurance costs.
Insurance companies such as Allstate, Travelers, and Hanover Insurance, as well as American International Group, Chubb, Kinsale Capital, and Cincinnati Financial, all saw their shares decline. Deutsche Bank analysts noted that in previous significant California wildfires, home prices and construction expenses were lower, which would result in higher insured losses for a comparable number of damaged structures.
Meanwhile, Edison International’s shares dipped after its Southern California Edison division received requests from attorneys representing insurance companies to preserve evidence related to the Eaton Fire in Los Angeles. However, the utility has not been linked to the fire by any fire agency, and it has not received any requests to remove or retain equipment.
The Eaton Fire, one of several devastating wildfires in Los Angeles, has left tens of thousands of structures destroyed and killed at least 10 people, making it one of the most destructive fires in the history of Los Angeles.
