State Farm Projects $7.6 Billion in Los Angeles Wildfire Losses

Reinsurance will significantly reduce the insurer's net losses, but financial challenges persist as S&P places its rating on negative watch.

State Farm estimates $7.6 billion in direct losses from the recent Los Angeles wildfires, the highest reported by any insurer so far.
The company has already paid $1.75 billion across approximately 9,500 claims, with total costs including administrative expenses reaching $7.9 billion.
Reinsurance from its parent company, State Farm Mutual, will reduce State Farm General’s net losses to $212 million, alongside a $400 million assessment for the California FAIR Plan.
State Farm General's financial surplus is expected to shrink by $400 million, prompting the company to request emergency rate hikes to stabilize its finances.
S&P Global Ratings has placed State Farm General’s AA financial strength rating on negative watch, citing weak underwriting performance and potential earnings pressure.