JP Morgan estimates that the insurance losses from the Southern California wildfires could reach close to $10 billion.

J.P. Morgan estimates that the insurance losses caused by the wildfires in Southern California could reach close to $10 billion. The bank added that this is a very preliminary estimate aimed at helping investors assess the potential financial impact, rather than providing an exact impact on possible claims. J.P. Morgan analyst Jimmy Bhullar stated in a report that most of the insurance losses are expected to be related to homeowners' insurance, with "much fewer losses for commercial insurance." He pointed out, "If major insurance companies are affected, reinsurance companies will also be affected." "However, compared to past fire-related losses, we expect major insurance companies to incur more losses, while reinsurance companies will incur relatively less losses." It is reported that on January 7th local time, wildfires broke out in multiple areas in Southern California due to the strong and dry Santa Ana winds, forcing at least 80,000 people to evacuate and destroying tens of thousands of buildings. With the ongoing strong winds, the fires have not been effectively controlled, and nearly 300,000 households were still without power on the morning of January 8th. California Governor Gavin Newsom recently declared a state of emergency in California. The Pacific-Palisades area wildfire has already burned over 15,800 acres (about 63.94 square kilometers) of land, destroying at least 1000 buildings, making it the most destructive fire in Los Angeles County's history; another fire north of Pasadena, the Eaton Corp. Plc fire, has also extended to over 10,000 acres (about 40.47 square kilometers), threatening around 13,000 buildings, with local residents forced to evacuate. Analysts have indicated that the insurance companies most affected by the wildfires in Southern California include Allstate Corporation, Travelers Companies, and Chubb Limited, while reinsurance companies like Arch Capital Group Ltd. and RenaissanceRe Holdings have also been affected, but their losses are expected to be lower than similar events before 2023.