Travelers expects $1.7 billion hit from California wildfires

(Reuters) — Travelers Cos. Inc. said Tuesday it expects $1.7 billion of pre-tax catastrophe losses from the California wildfires in January, outlining its exposure to what could be among the costliest natural disasters for the industry.

The preliminary estimate included losses from the company’s personal and commercial segments such as its quota from Fidelis, in which Travelers is a minority investor.

The wildfires destroyed thousands of structures and killed dozens of people, heightening concerns for insurers, some of whom have already started retreating from California due to the strict regulation and mounting wildfire losses.

California accounted for 10.4% of Travelers’ direct written premiums for 2023, according to its annual regulatory filing.

It was the sixth biggest insurer in the state that year, a report by the California Department of Insurance showed, but Travelers CEO Alan Schnitzer said last month that some of the publicly available data on the company’s market share had dated information.

Travelers had said it could account for the impact in the first quarter. It committed $1 million to the relief and recovery efforts in the state last month.

The company’s shares were marginally up in premarket trading.