JPMorgan sees ‘high but manageable’ insurance losses from LA fires

JPMorgan analyst Jimmy Bhullar says insurance industry losses from the Los Angeles fires will be “high but manageable.” The firm anticipates the related losses to be confined mostly to the homeowners’ insurance businesses at Allstate (ALL), Travelers (TRV), and Chubb (CB) and, to a lesser extent, commercial property businesses at Travelers, AIG (AIG), Chubb, and Kinsale Capital (KNSL). Based on a preliminary assessment of the affected area and historical events, insured losses from this fire could approach $10B, the analyst tells investors in a research note. JPMorgan says the homeowners’ line will bear most of the losses and that primary carriers are more exposed than reinsurers. Allstate, Travelers, and Chubb are the most exposed carriers, and Chubb’s losses could exceed its share, contends the firm. Reinsurers such as Arch Capital (ACGL) and RenaissanceRe (RNR) are exposed as well, but their losses should be less than for similar events prior to 2023, JPMorgan adds.