BlackRock CEO Larry Fink has warned that it could take a decade to rebuild Los Angeles after the devastating wildfires.
The deadly fires have already killed at least 24 people and are estimated to cause more than $40 billion in damage.
LA’s upscale Pacific Palisades neighborhood was virtually destroyed, while the neighboring coastal community of Malibu was hit hard by the fires.
Altadena, northeast of Downtown LA, was also destroyed.
“This is going to be one of the bigger issues we have to tackle over the next four years,” Fink said. CNBC.
‘If you let entire neighborhoods be destroyed and infrastructure, schools and supermarkets destroyed, this is not a solution for one year. This is going to be five, six, seven, maybe 10 years of repairs.”
More than 12,000 buildings were burned in the fires, several of which are still raging.
Fink added that the government will have to get involved in homeowners insurance as consumers factor in the devastation.
“Homeowners insurance is becoming an increasingly important part of homeownership,” he said.
His firm handles $11.6 trillion on behalf of retail and institutional clients and oversaw $700 billion in insurance company cash as of the end of the third quarter.
BlackRock CEO Larry Fink has warned that it could take a decade to rebuild Los Angeles after the devastating wildfires
The deadly fires have already claimed the lives of at least 24 people and are estimated to cause more than $40 billion in damage, mostly in the Pacific Palisades (photo before the fires)
BlackRock has also said that insurers are an increasingly important part of its customer base.
For Fink, a Los Angeles native, the fires have taken on personal meaning. He described the fires as “terrible to watch.”
“I used to hike in the Santa Monica mountains all the time; it was one of my pleasures growing up, as a kid looking for snakes and reptiles, walking the chaparral,” he said.
“I was there during the big fires in Bel Air, but we’ve never seen such devastation.”
Los Angeles homeowners’ anger 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 personal items, forcing insurance companies to make huge payouts.
State Farm said in 2023 that it would stop accepting new insurance applications for California homeowners and added last year that it would stop covering 72,000 homes in the state due to the increasing frequency and severity of wildfires.
Several celebrities are among those who have lost their homes as entire neighborhoods have been destroyed by the fires.
An aerial view of homes destroyed by the Palisades Fire. More than 12,000 structures have been burned in the fires that continue to ravage 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 policies in our area about four months ago,” an apparent reference to State Farm .
Even if residents are still covered by insurance, they could face a $115 billion shortfall because insurance companies are likely to cover only $20 billion of the $135 billion in estimated losses.
“The concern is not whether insurance companies will pay out for damages, but rather how much and how long it will last,” Amy Bach, executive director of United Policyholders, a California-based nonprofit consumer group, told NBC.
“For the people who lose their homes to these wildfires, there will be battles over coverage.”