Marine insurer NorthStandard has reported that the cargo vessel collision and subsequent collapse of the Francis Scott Key Bridge outside Baltimore in March 2024 has the potential to impact the outlook of the International Group of P&I Clubs (IG) reinsurers and those across the club’s other reinsurance programmes.
For those unaware, a significant section of the Baltimore bridge, which first opened in 1977, collapsed soon after it was struck by the Dali container ship in the early hours of March 26th.
In 2023, the Port of Baltimore reportedly handled more than $80 billion in cargo and over 14,000 jobs depend on the natural harbour, which is also the busiest port in the US for car shipments.
Shortly after the event, analysts at Morningstar DBRS suggested that insured losses could land between $2 billion and $4 billion.
It’s worth noting that even at the low end of this loss range, the Baltimore bridge collapse would still surpass the $1.5 billion insured losses of the Costa Concordia event, which capsized in 2012 and became the record marine insured loss.
According to NorthStandard’s annual review, the IG’s General Excess of Loss Reinsurance contract (GXL), which is the world’s largest marine reinsurance contract, was renewed in February 2024.
“Covering more than 90% of the world fleet, led by AXA XL, and with broad support from other long-standing reinsurance partners, the GXL reinsurance enables IG P&I clubs to offer uniquely high levels of free and unlimited coverage for most insured risks,” the firm explained.
NorthStandard noted that much like 2022/23, the 2023/24 policy year has seen a “reasonably benign” pool claims environment at this stage of development, despite two major international conflicts and other geopolitical challenges.
However, whilst in its early stages, and though the quantum of any loss is as yet unknown, NorthStandard noted that “the recent cargo vessel collision and subsequent collapse of the Francis Scott Key Bridge outside Baltimore in March 2024 has the potential to impact the outlook of the IG’s reinsurers and those across the club’s other reinsurance programmes”.
