California fires spark insurance crisis, projected losses of $150B
Five wildfires are still burning in Southern California, spreading to nearly 30,000 acres and destroying over 10,000 homes and businesses. While losses from the fires are expected to reach $150 billion, according to AccuWeather, these events are presenting a serious challenge for the insurance industry, particularly homeowners insurance in the region. CFRA Equity Research Vice President Cathy Seifert joins Morning Brief to uncover the impact this natural disaster event could pose for the broader insurance industry; major insurance stocks like Allstate (ALL), the Travelers Companies (TRV), Chubb (CB), Mercury (MCY), and American International Group (AIG) have been falling amid the increasing severity of the fires. “The insurance industry does have the capacity to address these claims. The issue, though, is a crisis of availability for homeowners in California,” she says, highlighting the distinction between economic losses and insured losses. Seifert transitions into the challenges in insurance availability due to climate change and regulatory shifts, especially in California. “Well, climate change, which we have an incoming administration that doesn't want to address, is going to increase or decrease the availability of an insurance, increase the crisis of availability, the protection gap, and ultimately the cost of climate change are inflationary as it relates to the California insurance market, interestingly enough,” she explains. Also, catch Yahoo Finance interview Susman Insurance Services President Karl Susman, who offers insurance advice for victims of the Los Angeles fires seeking to file claims. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. This post was written by Josh Lynch
