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(Bloomberg) -- Allstate Corp. said it expects about $1.1 billion of losses from the wildfires that ravaged swaths of Los Angeles last month.
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The anticipated cost partly reflects Allstate’s decision to reduce market share beginning in 2007, the insurer said in a statement Wednesday, when it reported fourth-quarter results.
Last week, Chubb Ltd. said it expected $1.5 billion of losses in the first quarter. Estimates of the total cost for the industry have climbed to as much as $40 billion.
The California insurance market has been in crisis in recent years, with carriers pulling back from wildfire-prone areas, blaming the rising cost of disasters and stringent state regulations limiting their ability to increase insurance rates.
Last year, Allstate said it would start writing new business in California on the condition that insurers be allowed to use catastrophe models and incorporate the cost of insurance in their pricing. Those two regulatory changes were adopted.
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