California’s deadly wildfires are raising the specter of higher insurance premiums for homeowners in the state.
After “two significant years in a row of losses, I think the discussion and the debate about the environment is pretty broad and pretty public,” Michael Klein, president of personal insurance at Travelers Cos., said Tuesday in an earnings call with analysts. The New York-based company is in discussions with the state’s Department of Insurance about a filing to increase prices for homeowners in California, Klein said.
The insurer is also talking with regulators about the possibility of not renewing some business in the state. It expects to add new underwriting procedures and further pull back on its appetite for new business after starting to restrict it in 2017.
The Camp Fire that tore through California last year, destroying structures and killing more than 80 people, ranked as the most expensive natural catastrophe in 2018, with total insured losses of $12.5 billion, according to a report from Munich Re AG. The fires led to the planned bankruptcy filing of California utility PG&E Corp. and have heightened the focus on the intensity of the state’s wildfire seasons. Travelers reported catastrophe losses, including the fires and Hurricane Michael, of $610 million before taxes in the fourth quarter, an increase of 22 percent.
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