Six people are still missing after a Singapore-flagged ship sailing out of Baltimore harbor bound for Sri Lanka struck a support pillar of the Francis Scott Key Bridge on March 26, forcing the closure of one of America's busiest ports.
With little clarity on when the Port of Baltimore will reopen, insurers and analysts are assessing losses related to property, cargo, marine, liability, trade credit and business interruption claims.
The scene of the collapse of the Francis Scott Key Bridge in Baltimore, Maryland (USA), after being hit by a cargo train, March 26, 2024. (Photo: AFP/VNA)
Depending on the duration of the blockage and the nature of the business interruption coverage for the Port of Baltimore, insured losses could range from $2 billion to $4 billion, said Marcos Alvarez, managing director of global insurance ratings at Morningstar DBRS.
He said the figure would surpass the record insured loss of the 2012 Costa Concordia luxury cruise ship disaster.
The claims could run into billions of dollars, Mathilde Jakobsen, senior director of analysis at insurance rating agency AM Best, also said.
Liability insurance for shipowners, including marine environmental damage, is provided through an organization called the P&I Club. It provides general insurance for about 90 percent of the world’s marine cargo, and its members reinsure each other by sharing claims of more than $10 million. According to AM Best, the group holds a total of $3.1 billion in reinsurance losses.
About 80 different reinsurers provide coverage to ship insurers, said Moody's Ratings analyst Brandan Holmes. He said while the total amount of claims is expected to be high, it is unlikely to be significant for individual reinsurers because it will be spread across so many companies.
Insurer Britannia P&I said the club was working closely with the ship's manager and relevant authorities "to establish the facts" and help ensure the situation was resolved quickly and correctly in a professional manner.
Mr Alvarez said the disaster was likely to put pressure on global marine insurance rates.
The initial estimate for the cost of rebuilding the bridge, which would likely be paid for by the federal government, is around $600 million, while a monthlong closure of the Port of Baltimore could cost the state of Maryland a total of $28 million, according to economic software analysis firm IMPLAN.
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