California fires could cost insurers $15bn
Moody’s Investors Service says the fourth-quarter earnings of re/insurers will be hit by wildfires in California, but the losses are described as “manageable”.
The Camp and Woolsey fires could rack up insured losses of up to $15 billion, Moody’s said in a report — even more than the state’s devastating fires in 2017.
The two blazes destroyed more than 20,000 residential and commercial structures and damaged 1,000 more.
The credit rating agency describes the Camp wildfire as “the deadliest and most destructive fire in California’s history”.
“The Camp and Woolsey wildfire losses could surpass the $12.3 billion of wildfire losses that P&C and reinsurers reported for the October and December 2017 California wildfires,” Jasper Cooper, a Moody’s vice-president, said.
“Global risk modelling and analytics firm RMS estimates the wildfires’ insured losses at $9 billion to $13 billion, including property and auto damage, business interruption, additional living expenses and contents loss.”
Total economic losses could be close to $20 billion assuming CalFire’s estimate of 18,793 structures destroyed by the Camp Fire and 1,500 structures destroyed by the Woolsey Fire and a statewide average wildfire loss value of $981,000 per structure, according to Moody’s.
Losses from the fires will likely be concentrated among insures with high exposures in the fire areas, including State Farm, Farmers, CSAA, Auto Club, Liberty Mutual and Allstate, Moody’s added.