JPMorgan estimates that the insurance losses caused by the wildfires in Southern California, USA, could approach 10 billion dollars. The bank added that this is a very preliminary estimate aimed at helping investors assess the potential financial impacts, rather than providing an exact assessment of possible claims.

JPMorgan Analyst Jimmy Bhullar stated in a report that most insurance losses are expected to be related to homeowners' Insurance, while losses related to commercial Insurance are expected to be much lower.

He pointed out, "If the major Insurance companies are affected, the reinsurers will also be affected. However, compared to past fire-related losses, we expect major Insurance companies to bear more loss while the reinsurers will incur relatively less loss."

It is reported that on January 7 local time, multiple areas in Southern California ignited wildfires due to the strong dry winds of the "Santa Ana Winds," forcing at least 0.08 million people to evacuate urgently, and thousands of buildings were destroyed.

Due to the ongoing strong winds, the fire has not been effectively controlled, and nearly 0.3 million households remained without power on the morning of the 8th. California Governor Gavin Newsom recently declared a state of emergency in the state.

According to reports, the wildfire in the Pacific-Palisades area has burned over 15,800 acres (approximately 63.94 square kilometers) of land, destroying at least 1,000 buildings, becoming the most destructive fire in Los Angeles County's history. Another fire, the Eaton Fire located north of Pasadena, has also extended to over 10,000 acres (approximately 40.47 square kilometers), threatening around 13,000 buildings, with local residents forced to evacuate urgently.

Analysts indicated that the Insurance companies most affected by the wildfires in Southern California include$Allstate (ALL.US)$、$The Travelers Companies (TRV.US)$and$Chubb Ltd (CB.US)$, while$Arch Capital (ACGL.US)$、 $RenaissanceRe Holdings (RNR.US)$Such reinsurance companies "have also been affected, but their losses are expected to be lower than those caused by similar events before 2023."

Editor/Danial