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 said today.
The massive Singapore-flagged container ship Dali sailing out of Baltimore Harbour bound for Sri Lanka reported losing power and the ability to manoeuvre 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 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 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 earlier today, boosted by strong underwriting and investment performance.
The insurance market had suffered an £800m loss in 2022.
Commercial insurers, who underwrite anything from oil rigs to professional footballers' legs, have coped in recent years with a pandemic, wars, inflation and rising losses from natural catastrophes by excluding some business and raising prices.
"We'll continue working with our market to deliver consistent profitable performance through disciplined underwriting," chief executive John Neal said in a statement.
Lloyd's said earlier this month that its underwriting profit more than doubled to £5.9 billion. Its investments returned £5.3 billion, helped by higher interest rates, compared with a £3.1 billion loss a year ago.
