
The devastating wildfires in Southern California have many of our clients inquiring about their own insurance coverages and their insurers’ financial health in the aftermath.
As you are aware, our team looks at renewals each year. If you haven’t had a meaningful renewal conversation with us in recent years, we encourage you to set up a time to do so. This will allow us to answer any questions you may have and have a detailed conversation with you about your policies. This is extremely important in terms of helping you understand you insurance program and addressing any areas of concern.
As far as the health of the insurers we work with, AM Best has stated that national insurance companies will be able to “weather the storm due to their robust capital positions". Standard & Poor’s has stated the following: “Although expected losses are steep, we believe many of our rated insurers have the capital resilience to absorb them, after strong results in the first nine months of 2024 (and likely for the year),” S&P continued. “Moreover, many major primary insurers in the admitted market, have either reduced exposure to or exited the California homeowners insurance market over the past two years.” S&P does not expect the LA wildfires to trigger rating changes.
In its report on the LA wildfires, Moody’s Ratings explained that after the major wildfires of 2017-2018, many California homeowners insurers non-renewed policies, “particularly in wildland-urban interface (WUI) regions, while enhancing underwriting standards, conducting inspections, requiring homeowners to take steps to reduce wildfire risk and reducing geographic clustering.” Moody’s noted that it will take weeks or months to determine the magnitude of the insured damages, but the Los Angeles wildfires are likely among the most costly wildfires in the state’s history.
For the non-admitted sector, S&P said, the $3.6 billion written in the excess and surplus (E&S) property market in California is relatively small. “These E&S specialty insurers are generally highly diversified and can quickly raise premiums to recuperate losses.”
While the full impact is not yet known, we are actively monitoring the results and advocating for our clients. In fact, our staff has been actively working on assisting clients. Our President & CEO, Celia Santana, is in California this week managing the claim process with our clients.
As your trusted insurance advisor, your long-term security and peace of mind are our top priority. We are in constant communication with our Insurance Company Partners. We will continue to track the current situation and provide any material updates.
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