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While the Los Angeles wildfires inch closer toward containment, estimates of insured losses continue to creep higher.

CoreLogic said the industry price tag of the Palisades and Eaton fires could land between $35 billion and $45 billion. Moody’s RMS, in adding an estimate of insured losses of between $20 billion and $30 billion, said what it called a “firestorm” will “prove the costliest wildfire in U.S. history.” Verisk chipped in with an estimate for the Palisades and Eaton fires of between $28 billion and $35 billion.

As the flames burn, Å˽ðÁ«´«Ã½Ó³»­ Journal interviewed leaders of three insurtech companies that specialize in insuring areas prone to wildfire. They shared their perspectives on the peril overall and discussed how the fires could affect insurance moving forward.

Valkyrie Holmes, Faura

Valkyrie Holmes, CEO of Faura, believes that a deep understanding of the structural qualities of buildings is crucial to insuring properties in high-risk areas. Her company specializes in helping insurance companies understand property survivability.

Faura goes beyond traditional climate modeling and taps into independent structure data to pinpoint the likelihood that a property will survive disasters. The company accounts for a property’s materials and resilience characteristics (such as vents designed to keep embers out of a building) and weighs that data against how those qualities have fared in past disasters.

Faura’s goal is to create a positive feedback loop by helping insurance companies stay profitable while also helping policyholders become more profitable consumers. Holmes said that “a good percentage” of Faura’s clients have written in areas impacted by the ongoing Southern California fires.

Holmes explained on Jan. 9 that preliminary Faura data from the wildfires showed the more survivable structures in the area, depending on where the wind was blowing, had “resulted in more profitable business, or business that would have been previously overlooked and forgotten about, therefore unlocking opportunities for the carrier.” She expected more concrete loss numbers to become available for the affected areas in the coming weeks.

When she spoke to IJ, Holmes called the devastation from the fires heartbreaking. She encouraged insurance industry professionals to keep an eye on how insurers think about measuring disaster risk and whether their portfolios are ready for a disaster of this size. High-risk areas with large amounts of brush, little amounts of rain and the potential for very high winds should prompt a deeper assessment.

“You’ve got to think about all of those different things,” Holmes said. “And if you match up for that in a lot of different areas, then it’s a question of, ‘Well, are the actual independent assets in the structures going to be able to survive?'”

Models that have long accounted for aggregated climate risk have been important and beneficial for the insurance industry, she said.

“Now, we need to take another step forward — which is not a very hard step, in all reality — but it is a different way of thinking,” Holmes explained. “Now we need to understand whether our assets are actually going to still be standing.”

Photo: Water is dropped by helicopter on a fire in the Hollywood Hills section of Los Angeles, Wednesday, Jan. 8, 2025. (AP Photo/Ethan Swope)

Topics Catastrophe Natural Disasters InsurTech Wildfire Tech