Posted on March 29, 2024
The collapse of Baltimore’s Francis Scott Key Bridge is likely to lead to the largest single marine insurance loss ever, the chair of Lloyd’s of London has said.
Bruce Carnegie-Brown said he expected to see insurers incur multibillion-dollar losses after the disaster, which resulted in the deaths of at least two people, with four others missing and presumed dead.
Early on Tuesday the 1.5-mile bridge in the Maryland city collapsed after a container ship heading to Sri Lanka hit one of its concrete columns.
The debris has blocked shipping lanes in the Patapsco River and forced the indefinite closure of the Port of Baltimore, one of the busiest ports on the US east coast.
Speaking to Reuters, Carnegie-Brown said it was too soon to put a figure on the expected losses but he would be “very surprised” if it did not result in multibillion-pound losses for insurers.
He said: “The tragedy had the capacity to become the largest single marine insurance loss ever.”
Lloyd’s, which runs the world’s largest insurance market, has companies active in the property and marine insurance markets among the 77 companies that operate within it.
On Wednesday, analysts at Barclays estimated that insurers could face claims of as much as $3bn (£2.4bn) as a result of the bridge collapse, with firms on Lloyd’s of London’s market the most exposed.
Barclays said claims for damage to the bridge alone could reach $1.2bn, and there could also be liabilities of between $350m and $700m for wrongful deaths. Hundreds of millions of dollars more would probably have to be paid out for business disruption caused by the port’s closure.
The bank said the significant involvement of Lloyd’s of London may make smaller London market reinsurers comparatively more exposed.
Lloyd’s reported a pre-tax profit of £10.7bn for the year to 31 December, which included profits from underwriting growing from £3.3bn last year to £5.9bn this year.
It said this was boosted by lower costs from large risks and a fall in natural catastrophe claims. According to the report, the number of major claims for the year dropped from £4.4bn in 2022 to £1.3bn across 2023.
The major claims for the year came from events such as wildfires in Hawaii, earthquakes in the Middle East, floods in New Zealand, Cyclone Gabrielle and Hurricane Idalia.
