Market Overview

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


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
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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