Baltimore bridge collapse likely to result in multibillion-dollar insurance claims

The collapse of Baltimore’s Francis Scott Key Bridge is likely to lead to a multi-billion dollar insurance loss, the chairperson of commercial insurance market Lloyd’s of London (SOLYD.UL) said on Thursday.

The massive Singapore-flagged container ship Dali sailing out of Baltimore Harbor bound for Sri Lanka reported losing power and the ability to maneuver before plowing into a support pylon of the bridge on Tuesday.

The impact brought most of the bridge tumbling into the mouth of the Patapsco River, blocking shipping lanes and forcing the indefinite closure of the Port of Baltimore, one of the busiest on the US Eastern Seaboard.

The tragedy could lead to up to $4 billion in insurance claims, Morningstar DBRS said.

It was too soon to put a figure on the total insurance loss, Bruce Carnegie-Brown told Reuters, but he said he would be “very surprised” if the event did not result in a multi-billion dollar loss, adding that “the tragedy has the capacity to become the largest single marine insurance loss ever”.

The previous record marine loss was from the Costa Concordia luxury cruise liner disaster in 2012.

Lloyd’s, which has more than 50 member firms, is active in the marine and property insurance markets, which are expected to face large claims from the damage to the bridge and the disruption at the port.

Lloyd’s had gross written premiums in 2022 of more than 6 billion pounds ($7.5 billion) in marine, aviation and transport insurance and reinsurance. North America is its largest market.

Carnegie-Brown also said the insurer has set aside 1.6 billion pounds ($2 billion) in reserves in the past two years for disputed aviation claims over planes stuck in Russia following its invasion of Ukraine.

Talks between aviation leasing companies and insurers to reach settlements over the multi-billion dollar claims were at a “reasonably advanced stage”, Carnegie-Brown said, ahead of major court cases in Dublin and London due to take place this year.

Lloyd’s reported a 2023 pre-tax profit of 10.7 billion pounds ($13.49 billion) earlier on Thursday, boosted by strong underwriting and investment performance.