John Neal, Chief Executive Officer (CEO) of the specialist Lloyd’s insurance and reinsurance marketplace, said this afternoon that the Baltimore bridge event provides an opportunity for the industry to show the value of insurance.
“I’ve been saying in different conversations this morning that actually the good news there is we are talking about an insured loss,” said Neal in response to a question on how concerning the Baltimore bridge catastrophe insured loss is.
The Lloyd’s CEO emphasised that the vessel, bridge, and Port Authority are all insured.
“So, I think the good news is that we can show the value of insurance on what is a complex and expensive loss, because each element of that claim will be dealt with by the insurer,” he said.
Neal went on to say that while there will undoubtedly be debates around subrogation, so who’s at fault and who should ultimately be paying the loss, this is something that the industry should be able to figure out itself.
From a Lloyd’s perspective, Neal reminded the audience that the marketplace anticipates a cost that will come from large individual risk losses or nat cat losses, explaining that the collapse of the Baltimore bridge on Tuesday is not outside of the normal levels of expectations of what the market should see in a given year.
“So, I think it’s positive. I think we can demonstrate the value of insurance through this type of loss,” he reiterated.
“And dare I say it, when we’re trying to innovate and think about new products, here we have another type of loss that impacts the supply chain. We saw the same with the Russian invasion of the Ukraine. I think I was saying to somebody earlier on that if you go back to the Thai floods in 2011 we saw the same issue. So, I think it’s an opportunity for us to show the value of insurance,” added Neal.
Given the complexity of this loss event, it will take time to be fully understood, but current estimates suggests that it could result in insured losses of more than $2 billion, which would surpass the record $1.5 billion of marine insurance losses from the capsizing of the Costa Concordia in 2012.
As we’ve discussed previously, reinsurers are expected to take on most of the total insured loss from this event.
