Insurers may face claims of billions of dollars in Baltimore bridge tragedy

LONDON: Baltimore’s Francis Scott Key Bridge collapse could cost insurers billions of dollars in claims, analysts say, with one putting it at as much as US$4 billion (RM19 billion), which would make the tragedy a record shipping insurance loss.

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

With little clarity on when the Port of Baltimore would reopen, 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.

“Depending on the length of the blockage and the nature of the business interruption coverage for the Port of Baltimore, insured losses could total between US$2 billion and US$4 billion,“said Marcos Alvarez, managing director for global insurance ratings at Morningstar DBRS. That would surpass the record insured losses of the Costa Concordia luxury cruise liner disaster in 2012, he said.

Mathilde Jakobsen, senior director, analytics at insurance ratings agency AM Best, also said the claims would likely run into “billions of dollars”.

Ship liability insurance, which covers marine environmental damage and injury, is provided through protection and indemnity insurers known as P&I Clubs.

Moody’s Ratings analyst Brandan Holmes said approximately 80 different reinsurers provided that cover to the ship’s insurers.

“While the total claim is expected to be high, it is unlikely to be significant for individual reinsurers since it will be spread across so many,“he said.

Initial estimates of the cost of rebuilding the bridge, which is likely to be paid by the federal government, are at US$600 million, economic software analysis company Implan said. – Reuters