Posted By Global Banking and Finance Review
Posted on February 26, 2025
By Tom Sims and Alexander Hübner
FRANKFURT - Germany's Munich Re expects about 1.2 billion euros ($1.26 billion) in claims resulting from the Los Angeles wildfires, it said on Wednesday, representing the biggest loss reported so far by a single European reinsurer for the January catastrophe.
The wildfires killed more than two dozen people and destroyed or damaged more than 16,000 structures, charring an area bigger than Paris.
"They were clearly the most substantial wildfire losses in the history of the insurance industry," Munich Re said.
Munich Re, the world's largest reinsurer, said that its estimate was a high degree of uncertainty because the losses were complex.
Analysts have estimated insurance claims across the industry could total $45 billion. Hannover Re, another German reinsurer, has said that it could face claims claims amounting to 700 million euros.
Fitch, the credit ratings company, has said that European insurers had reduced exposure to California after a spate of fires in 2017 and 2018 but would still be "materially affected" by the 2025 fires because of their scale.
Munich Re provided the estimate as part of its fourth-quarter earnings report, which showed a 2.5% fall in net profit, slightly worse than analysts had expected.
Fourth-quarter net profit was 979 million euros, down from 1 billion euros a year earlier and short of a 1.02 billion euro analyst consensus provided by the company.
Despite the hit from the fires, Munich Re expects net profit for 2025 to rise to 6 billion euros from 5.7 billion euros in 2024.
($1 = 0.9535 euros)
(Reporting by Tom Sims and Alexander Huebner; Editing by Miranda Murray and David Goodman)
