Catastrophe modelling firm Moody’s RMS Event Response expects insured losses from the ongoing Los Angeles wildfires to be between $20bn and $30bn.
Firas Saleh, director for North America wildfire models at Moody’s, told InsuranceERM: “This event continues to unfold from the perspective of final industry loss estimates, but unfortunately it will be one of the top three deadliest fires in California [across] a burnt area approximately three times the size of Manhattan. It will certainly be one of the most expensive wildfires in the US, given the number of structures damaged, and high-value homes.”
Moody’s noted the “significant uncertainty” in its estimate, given the Palisades and Eaton fires were still only 56% and 81% contained, according to today’s figures from CalFire. Moody's will issue a final estimate after full containment of the fires.
Mohsen Rahnama, chief risk modelling officer, Moody’s, said the events were a “wake-up call for the market”.
"The wildfires caused extensive damage beyond property to critical infrastructure, including water systems and other utilities, with potential economic impacts that could be several multiples of insured property losses,” Rahnama warned.
Numerous large sporting events for which LA must have stadia ready over the next four years include some games of the Fifa World Cup of football, in mid-2026, and the 2028 Summer Olympics. The requirement to be ready for the spectacles could further escalate costs of rebuilding burnt out properties, Rahnama added.
Moody’s estimate includes various costs California’s commercial property insurers are expected to face, and accounts for California’s FAIR Plan, 23% of whose total exposure is located in Los Angeles County.
CoreLogic last week estimated $35bn-45bn of insured losses to date, while brokers Gallagher Re and BMS have pegged insured losses at $20bn-30bn and more than $25bn, respectively.
Companies:Moody’s RMS