US primary insurer Travelers has disclosed in its first-quarter results today that it estimates 77% of its overall just over $1.7 billion of net losses from the Los Angeles, California wildfires in January came from the Palisades blaze.
Previously, Travelers said in February it expected its losses from the wildfires would be around $1.7 billion before-tax ($1.3 billion after-tax) and net of reinsurance recoveries.In its quarterly disclosure today, Travelers has revealed a total wildfire ultimate loss of $1.731 billion, pre-tax and net of reinsurance recoveries.
But the company also breaks this down by the individual blazes.
Travelers puts the Palisades fire loss at $1.339 billion, so accounting for 77% of the total, while the Eaton fire is a smaller $392 million loss for the insurer.
It’s worth highlighting that with subrogation hopes largely resting on the Eaton fire, it could mean that even if there is a determination of liability for the electrical utility in question, while Travelers would still see its ultimate decline, with the Palisades being the majority it may not decline as much as some would think, for a large US primary insurer.
It will be interesting to watch how the split between the two fires is disclosed, where companies choose to, as it will not only show where their concentrations are, it might also provide some reinsurance providers with hints as to which companies present the chance of benefiting from larger shares of any wildfire subrogation related to this catastrophe event that flows in the future.
Overall for the first-quarter, Travelers reported $2.266 billion pre-tax and after reinsurance catastrophe losses, with the California wildfires clearly the majority.
Aside from that, PCS catastrophe serial number 24, a severe wind and hail storm event, contributed a further $315 million pre-tax and after any reinsurance effects.
Even after the heavy catastrophe losses in Q1, Travelers still reported net income of $395 million for the first-quarter of 2025, while underlying underwriting income was up 32% at $1.583 billion pre-tax and the underlying combined ratio was also improved at 84.8%.
“We are pleased to report a substantial profit for the quarter despite the devastating January California wildfires,” explained Alan Schnitzer, Chairman and Chief Executive Officer. “We earned core income of $443 million, or $1.91 per diluted share, as outstanding underlying results, strong net favorable prior year reserve development and higher investment income more than offset catastrophe losses.
“Through continued terrific marketplace execution across all three segments, we grew our net written premiums in the first quarter to $10.5 billion.”
