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Los Angeles Wildfires Become Costliest in Insurance Industry History
Munich Re estimates $1.3 billion in insured losses, with total economic damages reaching up to $275 billion.
German reinsurance company Munich Re has reported that the recent wildfires in Los Angeles have resulted in the highest insured losses in the history of the insurance industry.
The company expects claims to total approximately 1.2 billion euros (1.3 billion dollars).
Munich Re, which provides insurance to other insurers, stated that the estimate remains subject to a high degree of uncertainty due to the complexity of the damages incurred.
However, the loss assessment makes the Los Angeles wildfires the most significant insured wildfire event ever recorded.
The fires, which burned for three weeks, forced thousands of evacuations and destroyed thousands of structures, affecting areas such as Pacific Palisades, Malibu, and Altadena.
According to private meteorological firm AccuWeather, total economic damages from the wildfires are estimated to be between 250 billion and 275 billion dollars.
Munich Re stated that the financial impact of the wildfires would be reflected in its first-quarter results for 2025, but reassured investors that the company is well prepared to absorb the losses.
Chief Financial Officer Christoph Jurecka noted that the company's exposure to such risks has been reduced in comparison to five years ago.
Despite the large claims, Munich Re’s CEO Joachim Wenning emphasized that these types of high-damage risks are part of the company’s core business.
He confirmed that the company would continue to provide wildfire coverage as long as compensation remains appropriate.
Munich Re reported a net profit of 5.7 billion euros for 2024, in line with market expectations.
In the fourth quarter of 2024, the company's net profit was 979 million euros, representing a three percent decline from the previous year.
Total claims from major disasters in 2024 cost Munich Re 3.9 billion euros, with 2.6 billion euros attributed to natural catastrophes.
The most costly weather-related events included Hurricane Helene, which caused 500 million euros in insured losses, and Hurricane Milton, which led to 400 million euros in claims.
Despite the financial impact of the wildfires, Munich Re remains optimistic about its 2025 outlook.
The company expects net profit to rise to six billion euros, with projected revenues reaching 64 billion euros for the year.
The company expects claims to total approximately 1.2 billion euros (1.3 billion dollars).
Munich Re, which provides insurance to other insurers, stated that the estimate remains subject to a high degree of uncertainty due to the complexity of the damages incurred.
However, the loss assessment makes the Los Angeles wildfires the most significant insured wildfire event ever recorded.
The fires, which burned for three weeks, forced thousands of evacuations and destroyed thousands of structures, affecting areas such as Pacific Palisades, Malibu, and Altadena.
According to private meteorological firm AccuWeather, total economic damages from the wildfires are estimated to be between 250 billion and 275 billion dollars.
Munich Re stated that the financial impact of the wildfires would be reflected in its first-quarter results for 2025, but reassured investors that the company is well prepared to absorb the losses.
Chief Financial Officer Christoph Jurecka noted that the company's exposure to such risks has been reduced in comparison to five years ago.
Despite the large claims, Munich Re’s CEO Joachim Wenning emphasized that these types of high-damage risks are part of the company’s core business.
He confirmed that the company would continue to provide wildfire coverage as long as compensation remains appropriate.
Munich Re reported a net profit of 5.7 billion euros for 2024, in line with market expectations.
In the fourth quarter of 2024, the company's net profit was 979 million euros, representing a three percent decline from the previous year.
Total claims from major disasters in 2024 cost Munich Re 3.9 billion euros, with 2.6 billion euros attributed to natural catastrophes.
The most costly weather-related events included Hurricane Helene, which caused 500 million euros in insured losses, and Hurricane Milton, which led to 400 million euros in claims.
Despite the financial impact of the wildfires, Munich Re remains optimistic about its 2025 outlook.
The company expects net profit to rise to six billion euros, with projected revenues reaching 64 billion euros for the year.
