Global reinsurers stable despite LA wildfires – S&P

But primary insurers are expected to withstand the losses.

Insured losses from the wildfires sweeping across Los Angeles County are projected to be substantial, but global reinsurers remain unaffected, according to S&P Global.

The financial impact for global insurers is expected to remain manageable. Current estimates suggest wildfire losses will stay within natural catastrophe budgets for the first quarter of 2025. 

Strong capitalisation and disciplined underwriting practices, including higher attachment points for property catastrophe coverage, further position reinsurers to absorb the losses without major effects on earnings.  

Despite the significant impact, primary insurers are expected to withstand the losses, supported by strong financial results in 2024 and reduced policy coverage in wildfire-prone areas of California.  

The wildfires mark an early start to the 2025 natural catastrophe season, following a challenging 2024 when global insured catastrophe losses reached $140b, making it the third costliest year on record. 

Whilst property catastrophe reinsurance pricing has moderated slightly from its peak, reinsurers remain focused on maintaining robust terms and conditions.