BlackRock CEO Larry Fink has warned it could take ten years to rebuild Los Angeles following the devastating wildfires.
The deadly blazes have already claimed the lives of at least 24 people and have been estimated to cause upwards of $40 billion of damage.
LA’s ritzy Pacific Palisades neighborhood is all but destroyed, while the neighboring coastal community of Malibu was badly hit by the blazes.
Altadena, which sits northeast of Downtown LA, was also devastated.
‘This is going to be one of the bigger issues we’re going to have to be tackling over the next four years,’ Fink told CNBC.
‘When you have whole neighborhoods destroyed and you have infrastructure and schools and supermarkets destroyed — this is not a one-year fix. This is going to be five, six, seven, maybe 10 years of fixing.’
More than 12,000 structures have been burned by the fires, several of which are still raging.
Fink added that the government will need to get involved with homeowners’ insurance as consumers reckon with the devastation.
‘Homeowners’ insurance is becoming a larger and larger component of home ownership,’ he said.
His company handles $11.6 trillion on behalf of retail and institutional clients and oversaw $700 billion of insurance companies’ cash as of the end of the third quarter.
BlackRock CEO Larry Fink has warned it could take ten years to rebuild Los Angeles following the devastating wildfires
The deadly blazes have already claimed the lives of at least 24 people and have been estimated to cause upwards of $40 billion of damage, especially in the Pacific Palisades (pictured before the blazes)
BlackRock has also said that insurers are an increasingly important part of their client base.
For Fink, a Los Angeles native, the fires have taken on a personal significance. He described the blazes as, ‘horrible to watch’.
‘I used to hike the Santa Monica mountains all the time; it was one of my pleasures growing up, looking for snakes and reptiles as a kid, walking through the chaparral,’ he said.
‘I was there during the great Bel Air fires, but we’ve never seen destruction like this.’
The anger of homeowners in Los Angeles is growing as they face an insurance crisis as companies could struggle to cover the staggering costs of the wildfires.
Tens of thousands of displaced LA residents have lost everything but the clothes they were wearing and a few select personal items, leaving insurance companies on the hook for colossal payouts.
State Farm said in 2023 that it would stop accepting new homeowners-insurance applications in California and then added last year that it would stop covering 72,000 homes across the state due to the growing frequency and severity of wildfires.
Several celebrities are among those who have lost their homes as entire neighborhoods have been flattened by the fires.
An aerial view of homes destroyed in the Palisades Fire. More than 12,000 structures have been burned in all the blazes still ravaging LA
Actor James Woods, whose Pacific Palisades home was engulfed by flames but miraculously survived, also confirmed in a post that ‘one of the major insurance companies canceled all the policies in our neighborhood about four months ago’, an apparent reference to State Farm.
Even if residents are still covered by insurance, they could face a $115billion shortfall due to insurance companies likely only covering $20billion of the $135billion in estimated losses.
‘The concern isn’t whether insurance companies will pay out for damage but rather how much and how long it will take,’ Amy Bach, the executive director of United Policyholders, a California-based nonprofit consumer group, told NBC.
‘For the people who lose their homes in these wildfires, there will be fights over coverage.’
