The wildfires around Los Angeles are set to cost European insurance giants up to a billion euros in payouts this year. Millions of people have been displaced, thousands of homes and buildings have been destroyed and at least five people have been reported dead due to the wildfires. While total economic loss due to the disaster is expected to be around $50 billion , JPMorgan believes that insured losses originating from the wildfire could be around $20 billion — double the $10 billion they forecast earlier in the month. At least seven European listed reinsurance firms are expected to bear about a billion euros ($1.02 billion) of the losses over the wildfire, according to analysts at German investment bank Berenberg. Their estimate did not include U.K.-based reinsurance firms, which could increase the total loss amount for European companies. Reinsurance firms offer policies to primary insurance providers, like Chubb , who are present in California and directly deal with customers on the ground. The reinsurance policies typically only kick in after about 400 million euros worth of losses are absorbed by the primary insurance provider. “If I think of the European insurers, and that excludes the London market… You’d probably be looking at about a billion [euros in loss],” Michael Huttner, an analyst at Berenberg, told CNBC. Huttner is currently rated as the best among 9,300 Wall Street analysts by TipRanks. While the total loss from the disaster is large, each insurance company is expected to take only a small portion. The figures are also unlikely to impact earnings if the fire is contained quickly, Huttner added. For instance, the largest net loss among European firms is estimated to be at Munich Re at 220 million euros. However, the reinsurer has already set aside up to 2.8 billion euros for potential losses from natural disasters this year. Despite such events, Munich Re still expects to post profits of more than 6 billion euros in 2025, according to analysts. Swiss Re, SCOR and Hannover Re are also set to payout hundreds of millions due to the wildfires. However, analysts cautioned that it’s still very early in the year with the scale and frequency of natural disasters for the rest of the year could alter the profit expectations for insurers. Allianz , Axa and Zurich Insurance Group , which owns the primary insurance provider Farmers in California, will all also face several hundred million in losses. In total, European insurance giants could lose up to a billion euros. JPMorgan analysts have also estimated that Japanese insurance firms Tokio Marine and SOMPO could also be impacted with around ($63 million) worth of losses. Despite the scale of the devastation in California, the losses to insurers are significantly lower than wildfires of the past. In 2018, wildfires in California cost the whole industry around $16 billion in losses. During that event, Munich Re absorbed the largest share of the loss at 500 million euros. The experience of that disaster and others has led to per-event deductibles (or excess) rising from 100 million euros to 400 million euros today. The losses to insurers, both in the U.S. and Europe, have also been partly reduced by the introduction of the FAIR Plan, a pooled fund built with contributions from multiple insurance providers in California. The system is expected to absorb the bulk of the losses first before private insurance companies begin paying out.