Baltimore ship tragedy: Insurers brace for multi-billion dollar losses

LONDON: Baltimore’s Francis Scott Key Bridge collapse could cost insurers several billions of dollars in claims, sources say, but it is too early to calculate the likely full financial losses of the tragedy that has shuttered one of the busiest ports in the United States.

Six people are still missing after a collision with a Singapore-flagged container ship destroyed the landmark bridge on Tuesday, forcing the closure of the Port of Baltimore.

With little clarity on when the port would re-open, insurers and analysts are now assessing the likely losses borne by underwriters across several product lines including property, cargo, marine, liability, trade credit and contingent business interruption.

“While the total cost of the bridge collapse and associated claims will not be clear for some time, it is likely to run into the billions of dollars,” said Mathilde Jakobsen, senior director, analytics at insurance ratings agency AM Best. Ship liability insurance, which covers marine environmental damage and injury, is provided through protection and indemnity insurers known as P&I Clubs.

The International Group of P&I Clubs collectively insures approximately 90% of the world’s ocean-going tonnage and member P&I clubs mutually reinsure each other by sharing claims above $10 million.