LOS ANGELES: US insurance stocks slid on Friday as analysts estimated insured losses from the wildfires menacing Los Angeles could reach as high as $20 billion, potentially making it the costliest disaster in California’s history.

Firefighters reported some progress fighting the wildfires that have charred hillsides, homes and streets in Los Angeles County, but the strong winds that fanned the flames were expected to pick up again on Friday, worsening conditions.

Analysts are evaluating the financial impact of the disaster, with J.P.Morgan doubling its forecast of insured losses to over $20 billion. Wells Fargo also expects similar insured losses and said the total economic hit from the disaster could be well above $60 billion.

The Pacific Palisades area is one of the most expensive neighborhoods in the US, home to Hollywood A-Listers and multimillion dollar mansions. Ahead of this week’s disaster, its insurance costs were among the most affordable in the country, according to a Reuters analysis.

But that is likely to change after the scale of losses anticipated in the wildfires now ringing Los Angeles, as well as regulatory changes enacted late last year.

“While leading US property insurers are in good financial condition, the California property insurance market has been challenging... leading many insurers to re-think their product offering, including an outright exit from the market,” Morningstar DBRS wrote in a client note.

The S&P Insurance Select Industry index was last down 2% on Friday.—Reuters