California wildfires: Insured losses could top $30B, Wells Fargo analysis finds

The devastating wildfires that have impacted Southern California over the last week could have insured losses topping $30 billion, according to a new analysis.At least 24 people have been killed in the outbreak of wildfires in the greater Los Angeles area, while officials say that at least 12,000 structures have been damaged or destroyed in the blazes. Financial analysts at Wells Fargo Securities released a report to clients on Sunday, which said that their "base case" for insured losses due to the wildfires was $30 billion, adding that the total losses could fall in a range between $20 billion and $40 billion.Within that total, about 85% of losses are expected to come from homeowners' insurance policies, while 13.5% are commercial property and 1.5% are personal auto losses, the Wells Fargo analysis found. The base case noted that average property values range around $3 million in areas affected by the wildfires.CALIFORNIA WILDFIRES: ESSENTIAL PHONE NUMBERS FOR LOS ANGELES-AREA RESIDENTS AND HOW YOU CAN HELP THEM"Regardless of outcome we see this as a manageable event for insurers," the Wells Fargo analysts wrote. They noted that at a total insured loss of $40 billion it would represent a 2% hit to equity for insurers.Under the $30 billion base case for insured losses, $25.5 billion of those would come from homeowners' insurance policies compared to $4.05 billion from commercial lines and $450 million from auto insurance policies. That would result in a smaller equity hit of 1.6%.Last week, JPMorgan analysts released a preliminary estimate that insured losses would reach $20 billion. That figure would make Southern California wildfires the most damaging in the state's history, as would the $30 billion estimate by Wells Fargo.MAPS SHOW EXTENT OF WILDFIRE DEVASTATION, HOMES DESTROYEDEither estimate coming to fruition would make this month's wildfires the costliest in the state of California's history, surpassing the 2018 Camp Fire which caused about $10 billion in insured losses.The Camp Fire impacted the Northern California town of Paradise and several nearby communities, causing 85 fatalities while affecting over 18,000 buildings.CALIFORNIA BANS INSURANCE CANCELLATION, NON-RENEWALS IN LA AREAS AFFECTED BY FIRESThe composition of insured losses from the Camp Fire detailed by JPMorgan was similar when compared with the ongoing Southern California wildfires analyzed by Wells Fargo.JPMorgan's report noted that personal property losses amounted to about 86% of the losses compared with 12% for commercial property and 2% from all other lines and auto insurance. It added that because the Southern California fires are impacting larger population centers, the insured losses are expected to be higher as a result.GET FOX BUSINESS ON THE GO BY CLICKING HEREWeiter zum vollständigen Artikel bei FOX Business Weiter zum vollständigen Artikel bei FOX Business