A.M. BestTV: California Wildfires Will Impact Homeowners Insurers, Say A.M. Best Analysts

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FOR IMMEDIATE RELEASE

OLDWICK - AUGUST 20, 2018 08:36 AM (EDT)
In this ^A.M.BestTV episode, Sridhar Manyem, director, and Jason Hopper, associate director, both in A.M. Best’s industry research and analytics department, said losses from this year’s numerous wildfires in California will likely impact pricing and underwriting for the state’s homeowners market. Click on http://www.ambest.com/v.asp?v=wildfires818 to view the entire program.

Manyem spoke about how losses so far in 2018 compare with that of 2017, which was also a very destructive wildfire season in California. “The situation is still evolving,” said Manyem. “Major wildfires continue to burn across California. A.M. Best believes that the amount of damage that has happened in 2018 will be comparable or greater than the amount of damage that happened in 2017. We think that it is still going to be an earnings event. For some insurers, it could be a capital event. We will know the more complete picture as things stabilize.”

Hopper addressed the issue how this will change the homeowners market in California in terms of availability or pricing.

“A.M. Best expects some price increases throughout the state, more so where fires have already destroyed some structures,” he said. “It might also cost a little more to replace any structures that might get burned down a second time, and there will be more changes in underwriting process and loss mitigation strategies. Additionally, reinsurance costs could go up if pricing continues to increase.”

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^A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html . View ^A.M.BestTV episodes at http://www.ambest.tv .

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry.