The costs related to the wildfires wreaking havoc across extensive areas of Los Angeles continue to rise, with recent projections for total losses in the insurance sector climbing to approximately $40 billion.

The revised figure announced on Tuesday by analysts at Keefe Bruyette & Woods is double their preliminary estimate provided just a day earlier. In their message to clients, they highlighted the “ongoing potential for increased insured losses” due to the fires in the region remaining largely uncontrolled. Their most optimistic scenario puts insured losses at about $25 billion.

Los Angeles is bracing for a greater fire threat at least until Wednesday as the area experiences hot, dry winds. After a week of persistent fires, at least 24 lives have been lost, and entire communities have been turned to ash.

ADVERTISEMENT

CONTINUE READING BELOW

The containment status of the Palisades and Eaton fires, which have caused the most destruction over the past week, was reported at 17% and 35%, respectively, as of Tuesday, according to information from California’s Department of Forestry and Fire Protection.

According to KBW analysts, Allstate Corp, Travelers Cos, and Chubb are among the firms that might face the most significant primary losses due to these fires.

Nevertheless, insurers that cater to high-net-worth homeowners, including Chubb, American International Group, and Cincinnati Financial Corp, may have a larger exposure than what their overall market shares would usually suggest, the analysts noted.

© 2025 Bloomberg

Keep informed with Moneyweb’s in-depth finance and business news on WhatsApp here.