By Jean Eaglesham

Shares of leading U.S. home and auto insurers fell on concerns the Los Angeles infernos, likely to be the costliest wildfire in U.S. history, will hit earnings.

Preliminary estimates of losses from the fires have increased sharply, as the blazes have spread. JPMorgan now forecasts a hit to insurers of more than $20 billion. That financial hit will be shared among insurers and the reinsurers who take on some of their risks.

Most of that is expected to stem from home insurance, with lower losses in auto and commercial-property coverage. The expected losses are sufficiently high to affect reinsurers as well.

Of the publicly traded insurers, Allstate has the greatest exposure to the fires, with a 6% share of the Californian home-insurance market, analysts said.

-- Allstate shares $(ALL)$ fell more than 5% premarket in thin trading volumes.

-- Stock in American International Group $(AIG)$, Chubb $(CB)$, Progressive $(PGR)$ and Travelers $(TRV)$ also dropped.

While the fire was likely to reduce earnings for most insurers, Progressive could prove the exception, JPMorgan analysts said. The auto insurer has minimal exposure to Californian home insurance, unlike some mutually owned rivals such as State Farm, and could benefit if rivals raise auto rates to offset fire losses.

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(END) Dow Jones Newswires

January 10, 2025 07:06 ET (12:06 GMT)

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