Allstate says it will incur a $1.1 billion loss.
Transcript:
Conway Gittens: The economic toll from the California wildfires is just starting to become clear. Allstate is the latest insurer out with numbers. The insurance company says it will pay out $1.1 billion in insured claims. That’s just a small fraction of the checks insurance companies will have to send out. According to CoreLogic, insured losses are expected to fall in between $35 billion and $45 billion.
Allstate will be looking to cover its payouts by limiting the number of policies within the state. And, it is not alone. Other insurers are doing the same. In addition, insurance companies want regulators to approve higher premiums to match the higher risk of property damage due to natural disasters and climate change. State Farm, California’s biggest insurer, wants a 22 percent “emergency” spike in insurance premiums. It has already paid out $1 billion in insurance claims and expects that number to go up. Chubb Insurance put its payout at $1.5 billion.
As for AllState, the full impact of the California wildfires are yet to be realized. The $1.1 billion number given out is just a preview released as part of AllState’s fourth quarter results. The wildfires took place in the first quarter of 2025. For all of 2024, AllState posted an adjusted profit of $4.9 billion despite the checks it wrote to cover damages from Hurricanes Milton and Helene.
Turning to Thursday’s market action, investors were a bit nervous ahead of the all-important jobs report. The data due out Friday will also include benchmark revisions for all the job numbers for 2024. Meanwhile, new applications for unemployment benefits are out. Jobless claims rose more than expected last week but remain at a level which suggests the labor market is stuck in paralysis.
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