Marsh McLennan says subsidies for insurance are “the wrong conversation” after the record wildfires in southern California, and the focus should be on rebuilding communities so they are more resilient.

Insured losses may pass $US30 billion ($47.82 billion) and upcoming reinsurance rate renewals may be pushed higher by the catastrophe last month.  

“The conversation we should be having really is about building greater resilience into these communities rather than trying to find ways to subsidise insurance,” president and CEO John Doyle told market analysts.  

“As a major risk adviser, we certainly have something to say about the future and efforts to build back with greater resilience.

“The California homeowner market was under real stress before these events and it just underscores the critical need to build better resilience in these communities. That will lead to happier homeowners and residents of southern California and other catastrophe-prone areas over time. Important steps need to be taken so that we’re not in the same sad and devastating place again.”  

Marsh McLennan’s Guy Carpenter reinsurance arm has formed a wildfire taskforce of meteorologists, modellers, analysts, claims staff and brokers, and says it is helping clients assess losses.

“It’s going to be a long road back and we’re going to support them along the way,” Mr Doyle said.

“We’re helping with relocation of families, beginning to think about claims prep and filing claims with insurers and then the rebuilding effort.” 

Reinsurance rate reductions secured at the January renewals could be “tempered” in April, the business says.  

Broker division Marsh’s president and CEO Martin South says overall rates fell 2% in the fourth quarter.

“We did see some rate decreases in the property book in the last quarter and slowdown across the world. It's really too early to say what this [LA fire] impact is going to have. It’s not a big commercial event for our clients,” he said.