Los Angeles wildfires are raging, insurance industry losses are expected to surge to $20 billion.

Morgan Stanley analysts said that the potential losses for insurance companies from the Los Angeles wildfires are expected to exceed $20 billion, doubling the estimate from the previous day. Led by Jimmy Bhullar, Morgan Stanley analysts warned on Thursday that if the fires are not contained and the destruction continues to spread, the total insurance losses could further increase. On Wednesday, analysts estimated that the insurance industry losses would be close to $10 billion. This estimate suggests that this week's wildfires may result in larger losses than the 2018 Camp Fire in Butte County, which caused approximately $10 billion in insurance losses and is the largest wildfire in California history to date. The wildfires, which have been raging for three days, have consumed large parts of Los Angeles, resulting in at least 5 deaths and over 29,000 acres of land being destroyed. By Thursday evening, the fire in the Pacific-Palisades area was still not under control, but firefighters managed to fully contain the fire threatening Hollywood. Accuweather Inc. estimates that total damages and economic losses (including uninsured losses, wage losses, and disruptions in the supply chain, among other indirect economic impacts) will range between $20 billion and $20 billion. In recent years, the crisis in the California homeowners' insurance market has been worsening, and the wildfires have added even greater pressure to this market. Traditional insurance companies have been pulling out of California, citing rising costs of natural disasters and strict pricing regulations. This has led homeowners to flock to California's FAIR Plan, which is the state's last resort insurance company. The president of the company stated last year that its financial condition is not sufficient to handle the costs of major disasters.