Allstate announced this week the financial impact of the country’s most expensive flame, which became the second leading insurer, as it said it expects to lose $1.1 billion from the Los Angeles fire.
The company, Northbrook, Illinois, said the figures represent losses before tax and after deducting payments received from reinsurance. The company provided estimates when it announced its fourth quarter revenue. This led to net profit rising 30% to $1.9 billion.
Allstate said the estimated losses from the fire were minimized by a “comprehensive reinsurance program” and a decision to reduce market share in 2007. Allstate is the sixth largest airline in 2023 with a 5.8% share of the state’s homeowner market. This is because insurers usually get reinsurance from other large insurers and limit their payments during huge wildfires and other catastrophic events.
The company also received approval last November for an average interest rate increase of 34%.
Last week, another large insurer, Chubb Ltd., said its total losses from the fire totaled around $1.5 billion, with the financial impact expected to be limited to the first quarter.
In 2023, the US and Swiss insurers were only 2.27% stake in the California homeowners market, placing them outside the state’s 10 largest home insurance companies. However, according to Zillow, the focus is on providing coverage of more expensive homes, such as the Pacific Pallisard ruler.
California’s largest home insurance company, State Farm General, has not announced the loss, but on Monday he asked state officials to raise emergency rates by an average of 22%, claiming that the fire placed the company in a disastrous financial strait. I’ve said that.
The insurance company, a subsidiary of Mutual Automobile Insurance Co., a state farm in Bloomington, Illinois, said the company has already received at least 8,700 claims and has paid more than $1 billion to its customers. They also expect to pay “significantly more” to meet the claim.
The insurance company said there is no need to “full limit” the state’s ability to provide home insurance as fees will need to be increased to restructure the company’s capital base. Industry rating agencies say they expect such premiums to increase due to the fire.
Risk modelers estimate that payments for property damage, temporary housing costs and other claims caused by fire will cost the insurance industry between $2 billion and $45 billion. It would make the flame one of the worst natural disasters in the country, but it probably doesn’t cost as much as Hurricane Katrina.
The Los Angeles area disaster is just the latest in a series of mega fires that have been hit by the state since the last decade. In 2018, a camp fire destroyed the paradise town of Sierra Nevada Foothills, causing $12.5 billion in insurance losses, causing the most expensive fire in US history at the time.
Fires force more to insurers in fire-prone areas to drop policyholders, stop creating new insurance and force more to state fair plans, the last resort insurers that offer limited coverage. I’ve started doing this. The plan has not yet announced any losses, but this is expected to be significant.
Allstate said last year, it would only begin creating new policies in the state if the approved fee hike was found appropriate and reforms defended by California Insurance Commissioner Ricardo Lara were introduced. I did.
These reforms that allow insurers to claim reinsurance costs to California policyholders are now in effect.
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