🔥 California wildfires: a disaster that shocks residents and the market!

We're all surely watching the intense wildfires in Los Angeles - some of the most destructive and costly in history. California. These fires have not only affected residents, but also the stock markets.

Insurance companies under pressure:
Major insurance companies such as Allstate $ALL, Travelers $TRV, Chubb $CB and Mercury $MCY are experiencing declines in their stock prices. Mercury is the worst off , losing nearly 17 % of its value - a fifth of its premiums come from California.

PG&E on thin ice:
Shares of Pacific Gas and Electric $PCG, a major energy supplier in Northern California, fell more than 8 %.

Utilities in the red:
Shares of Edison International $EIX, the parent company of Southern California Edison, fell over the week by 13 %. Approximately 246,000 Californians were without power due to safety outages, adding pressure on the utility sector.

💸 Insured losses and damage estimates
According to analysts at JPMorgan insured loss estimates have doubled from $10 billion to $20 billionand that number may continue to rise. Insurers with large exposures in California, especially in real estate, face enormous challenges as the value of homes and businesses in the affected areas reach billions of dollars.

🌍 Long-term context: climate change
These fires are not an isolated event. Climate change is bringing more frequent and intense natural disasters that are putting increasing pressure on insurers and utility companies. California is also struggling to keep insurers in the market at all. The government is considering regulations that would give insurers more certainty, but the question is whether that will be enough.

It's a horrible and frightening sight to watch neighborhoods become mere ruins and charred rubble in a matter of hours. Hopefully the winds will soon calm down and local authorities will be able to bring the fire under control.