A fast-moving wildfire freshly tore through the Hollywood Hills early Thursday, threatening a region synonymous with the American film industry.
The blaze added to the strain on millions of Los Angeles residents already grappling with devastating fires that have decimated entire neighborhoods and turned the skies into a smoky, ember-filled haze.
At least five lives have been lost, and tens of thousands remain under mandatory evacuation orders or warnings.
The wildfires have scorched over 27,000 acres—an area nearly the size of 20,000 football fields.
Among the largest are the Palisades and Eaton fires, which together have destroyed more than 2,000 structures.
Both rank as the most destructive wildfires in Los Angeles history.
Pacific Palisades bears the brunt of the destruction
Apart from the loss of life and property, the economic costs of wildfires are rising by billions.
AccuWeather on Wednesday estimated that the economic costs would reach up to $57 billion.
That’s more than triple the forecaster’s assessment of the wildfires in Hawaii in 2023 ($14 billion to $16 billion), but less than the 2020 West Coast wildfires ($130 billion to $150 billion).
“This is already one of the worst wildfires in California history,” Jonathan Porter, AccuWeather’s chief meteorologist, said in a press release sent to Euronews Business on Thursday.
“Should a large number of additional structures be burned in the coming days, it may become the worst wildfire in modern California history based on the number of structures burned and economic loss,” he added.
Upscale areas like Pacific Palisades, with a median home value of around $2 million, have borne the brunt of the destruction.
Pacific Palisades is one of the top 25 most expensive zip codes in the nation, said Firas Saleh, director of North American wildfire models at Moody’s, a global research and analysis firm.
Shares in Edison International, the utility serving Los Angeles, dropped 10% amid investor fears of potential liabilities, echoing past legal battles that cost other utilities billions.
Hollywood halts as flames threaten productions
The entertainment industry, a cornerstone of the Los Angeles economy, has come to a standstill.
Productions for major TV shows, including Grey’s Anatomy, NCIS, and Jimmy Kimmel Live!, have been suspended.
High-profile events such as Oscar nominations and the Critics Choice Awards have been postponed, while Disney’s Burbank headquarters and NBCUniversal’s Universal Studios Hollywood theme park temporarily shut down.
The fires’ impact on Hollywood extends beyond economic losses, threatening the region’s identity as a global entertainment hub.
Home insurance crisis deepens
The California state has been battling to keep insurers from abandoning the market, especially after wildfires in 2017 and 2018 erased 25 years of industry profits.
However, the recent blazes could accelerate this retreat, pushing already high insurance premiums even higher.
JPMorgan analysts said in a “very preliminary estimate to help investors gauge the likely impact” that they believed insured losses “could approach $10bn” based on an assessment of the affected area.
Specialist insurance companies focused on the most expensive homes faced high payouts, JPMorgan said in a note to clients, with Allstate, Travelers and Chubb among the most exposed carriers in the state. Chubb has a particular focus on high-net-worth properties.
Between 2019 and 2024, over 100,000 Californians lost their coverage. State Farm, one of the state’s largest insurers, cut 70% of its policies in the Santa Monica Mountains area alone last summer.
As private options dwindle, many homeowners have been forced to rely on the California FAIR plan, a state-backed last-resort insurance program.
However, if the plan requires additional funding, it can draw on private insurers operating in the state, potentially driving up rates for all policyholders statewide.
RenaissanceRe and ArchCapital are among the reinsurers exposed to the wildfires, JPMorgan said, but analysts at the bank predicted that their losses would be lower than those for similar events prior to 2023.
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