Baltimore bridge collapse to trigger one of the biggest insurance losses in history
The Baltimore bridge collapse will trigger one of the largest insurance losses in history, Lloyd’s of London has warned.
The market, founded in 1688 to offer shipping insurance, predicted that the disaster would likely trigger a multibillion-pound loss once all claims are settled.
Lloyd’s said that it could more than withstand the financial hit after a benign period for catastrophes.
Chief executive John Neal said: “This has all the hallmarks of being one of the biggest marine losses in history.”
The Singapore-registered container cargo ship Dali crashed into the Francis Scott Key Bridge in Baltimore on Tuesday, causing the structure to collapse.
Barclays has predicted that the insurance loss could land between $1bn (£800m) and $3bn.
The ship was insured through Britannia, one of 12 protection and indemnity clubs that insure 90pc of the world’s shipping. Britannia is still assessing the situation as the investigation continues.
Britannia itself is thought to have purchased reinsurance from some of the specialist reinsurers operating in Lloyd’s, which means the losses may feed through to the market.
Mr Neal said Lloyd’s expects to be able to more than withstand the incident due to the low level of natural catastrophes in 2023.
Lloyd’s sets aside about 10pc of the premiums collected to pay for large losses or natural catastrophes each year, equivalent to about £6bn.
Large losses for 2023 cost only 3.5pc, leaving the insurance market with a big surplus which can help cover the Baltimore claims.
Mr Neal said: “This is not an unusual loss in itself. Sometimes we get a hurricane in the US and only half of it is insured because people haven’t bought insurance.
“The good news with the Baltimore losses is the vessel is insured, the bridge is insured, the Port Authority is insured.
“So from a financial perspective, there is legitimate insurance cover in force.”
Mr Neal said claims from the supply chain complications may take longer to solve.
The Port of Baltimore is America’s largest terminal for importing cars and its closure led many automotive manufacturers to seek new routes.
The previous record for a maritime claim was $1.5bn, recorded when the Costa Concordia cruise ship ran aground in 2012.
Lloyd’s made a pre-tax profit of £10.7bn in 2023, helped by strong underwriting after the frequency and severity of natural catastrophes was lower than normal. Strong returns on investments also helped.
