By George Glover
The Santa Ana winds could spark a flare-up in the Los Angeles wildfires, which may already be the costliest natural disaster in U.S. history.
The death toll from the fires climbed to 24 from 16, officials said Sunday evening. The number of confirmed fatalities is likely to carry on rising, with responders using cadaver dogs to search for victims.
More than 12,000 structures have burned across the region. The private forecaster AccuWeather estimates total damage and economic loss of $135 billion to $150 billion, and J.P. Morgan analysts said last week that insured losses could top $20 billion or "even more if the fires are not controlled."
Shares in publicly-listed insurers were sliding again on Monday, having racked up big losses last week. In premarket trading, Allstate stock fell 1.2%, Travelers dropped 2.3%, and Chubb was down 0.7%. Futures tracking the S&P 500 were down 0.8% as hot jobs numbers sparked fears that the Federal Reserve won't cut interest rates at all in 2025.
But shareholders shouldn't panic -- there are signs that the selloff in insurance stocks is overblown. Barron's argued last week that while the fires will be a short-term blip for the industry, climate change and severe weather could actually help insurers, by enabling them to raise premiums.
Jefferies analyst Yaron Kinnar said in a research note Monday that the fires would likely be a "manageable earnings event" because most insurers have taken steps to derisk from California over the past few years. Allstate and Chubb are among the stocks that look most oversold, he added.
Firefighters were able to put out some blazes late Sunday, but officials warned that Santa Ana winds still pose a risk. The National Weather Service said there could be gusts of between 45 and 70 miles an hour in parts of L.A. on Tuesday and Wednesday, which could start spreading the fires again.
Write to George Glover at george.glover@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 13, 2025 07:34 ET (12:34 GMT)
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