In this aerial view taken from a helicopter, the Kenneth fire (below) approaches homes while the back side of the Palisade fire (above) continues to burn Los Angeles county, California on January 9, 2025. Josh Edelson | Afp | Getty ImagesInsurers exposed to the California homeowners’ market sold off sharply Friday as the devastation caused by the Los Angeles wildfires spread.Shares of Allstate and Chubb both declined 4% in morning trading, while AIG and Travelers fell about 2% each. These four stocks were among the biggest losers in the S&P 500 on Friday morning.Allstate, Chubb and Travelers are the most exposed carriers to insured losses in the wildfires, according to JPMorgan. The Wall Street firm noted that Chubb could have a particularly high exposure due to its high-net-worth focus in the region.Shares of insurers drop FridayThe destructive fires this week could become the most costly in California history. The insured losses from this week’s fires may exceed $20 billion, and the estimate could be even higher if fires spread, JPMorgan estimated Thursday. Those losses would far surpass the $12.5 billion in insured damages from the 2018 Camp Fire, which was the costliest blaze in the nation’s history, according to data from Aon.Moody’s Ratings expected insured losses to run well into billions of dollars given the area’s high values of homes and businesses in the affected areas.The Palisades Fire is the largest of the five blazes. It has burned more than 17,000 acres, destroying more than 1,000 structures, according to California authorities. Pacific Palisades is an affluent area where the median home price is more than $3 million, according to JPMorgan.Insurance companies have asked Southern California Edison to preserve evidence related to the devastating wildfires that have swept Los Angeles, according to a company filing to regulators.Certain reinsurers were also affected. Arch Capital Group and RenaissanceRe Holdings declined 2% and 1.5% on Friday, respectively. JPMorgan believes that rising loss estimates increase the likelihood of reinsurance attachments at various insurers being breached.— CNBC’s Spencer Kimball contributed reporting.Don’t miss these insights from CNBC PROWall Street analysts see big gains for these Warren Buffett-owned stocks in 2025Dan Niles names cash as a top pick for the first time since market drop in 2022Morgan Stanley says rising rates are threatening the bull market so ride it out in these quality stocksGoldman adds three stocks to conviction list to start year, including one where it sees nearly 60% upside …
