The Los Angeles (LA) area in the US has witnessed a devastating impact from a series of wildfires that erupted since the second week of January. There were 312 wildfires that resulted in 28 deaths and the destruction of 16,255 structures as of 29 January, with the Palisades and Eaton wildfires continuing to burn, according to the California Department of Forestry and Fire Protection. Estimates from the University of California suggest that the total damage from the LA wildfires could surpass $20 billion. Consequently, US insurers may see increased claims in 2025 across various insurance lines, potentially affecting their profitability, says GlobalData, a leading data and analytics company.

Manogna Vangari, Insurance Analyst at GlobalData, comments: "The recent LA wildfires are expected to impose significant financial burdens on property and casualty insurers, with damages potentially exceeding billions of dollars. The destruction affects both residential and commercial properties, particularly high-value homes and businesses, leading to anticipated insured losses to be among the highest in California's history."

Property insurance claims are projected to represent a 13.1% share of total general insurance claims in the US in 2025, totaling $247 billion. Incurred losses are anticipated to rise by 7.5% in 2025, reaching $193.6 billion from $180.1 billion in 2024. However, the full effect of wildfires may push actual claims even higher. Consequently, the profitability of the US general insurance sector is expected to be notably affected, with the average combined ratio predicted to exceed 100% in 2025.

According to GlobalData's Global Insurance Database, the US property insurance industry is expected to grow at a CAGR of 7.3% over 2025–29, from $416.3 billion in 2025 to $551.1 billion in 2029, in terms of gross written premiums (GWP).