APAC insurers stable despite LA wildfires, says Fitch

Japanese non-life insurers operating in the US are expected to manage their losses.

Fitch Ratings says the recent wildfires in Los Angeles are unlikely to affect the ratings of APAC insurers and reinsurers, which have limited exposure to the event. 

Whilst rising catastrophe losses will increase reinsurance costs for global insurers, including those in APAC, strong reinsurance programs are expected to minimise the financial impact in the near term.  

Insured losses from the wildfires are projected to reach between $35b and $50b, surpassing previous records. 

However, APAC insurers have little direct exposure and no significant involvement in California’s insurer of last resort, the FAIR Plan. 

Fitch-rated APAC insurers and reinsurers with potential exposure maintain strong capital positions and diversified risk portfolios, limiting the disaster’s impact on their credit ratings.  

Japanese non-life insurers operating in the US are expected to manage their losses due to solid earnings and capital reserves. 

APAC insurers and reinsurers such as Taiping Reinsurance and QBE Insurance Group have reduced their presence in the US in recent years to manage catastrophe exposure. Whilst they may still have some direct and indirect exposure, Fitch expects any financial impact to remain within rating sensitivities.