Investing.com -- BlackRock Inc (NYSE:BLK).'s Chief Executive Officer, Larry Fink, has projected that the recovery from the recent wildfires in Los Angeles could take up to a decade. The fires, which have been active for a week and are still largely uncontrolled, have caused extensive damage, leading to a rethink of homeowners’ insurance policies over the next four years.
Fink, himself a Los Angeles native, said during an interview with CNBC that these fires might necessitate a redefinition of event risk in various parts of the country. He emphasized that homeowners’ insurance is increasingly becoming a significant aspect of home ownership, especially in light of such large-scale destruction.
The BlackRock CEO's comments were made public following the company's announcement of its fourth-quarter earnings on Wednesday. He pointed out that the wildfires have not only destroyed entire neighborhoods but also essential infrastructure, schools, and supermarkets. Fink stressed that the recovery from such widespread damage is not a quick fix, predicting a recovery period of five to ten years.
Insurance losses from the wildfires are currently estimated to be as high as $40 billion. The National Weather Service has warned that parts of Los Angeles and Ventura counties will continue to face "extreme fire danger" at least until Wednesday afternoon local time. However, conditions are expected to improve slightly on Thursday as the winds shift. The wildfires have resulted in at least 24 fatalities and have incinerated entire neighborhoods.
Describing the ongoing fires as "horrible to watch," Fink's predictions underscore the long-term implications of these devastating wildfires on homeowners and the insurance industry.
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