By Louis Goss
Insurance payouts from the collapse of the Baltimore’s Francis Scott Key bridge could amount to one of the largest marine insurance losses in history, Lloyds of London CEO John Neal said.
In an interview with Bloomberg , the head of the centuries old insurance market said insurance companies will be liable to cover the multi-billion-dollar losses as he noted that “the vessel is insured, the bridge is insured, the port authority’s insured, so this is an insured loss.”
“If you look at it from a marine point of view, this could be one of the largest marine losses in history,” Neal, who has headed Lloyd’s of London since 2018, said.
In a note published Wednesday, Barclays analysts said insurers could be liable to pay out $1 to 3 billion to cover the cost of the disaster, as they estimated damage to the Francis Scott Key Bridge alone could cost insurance companies $1.2 billion.
Insurers could also face $300-700 million in wrongful death claims, related to the six construction crew workers who are presumed to have died during the incident. Business interruption claims relating to disruption at Baltimore’s port could cost insurers millions more.
Neal, however, said that Lloyds has sufficient “financial power” to cover the costs of the disaster that saw Singapore registered container ship MV Dali crash into the 1.6 mile long bridge that crosses the Patapsco River between Dundalk and Baltimore.
“From our point of view, we assume that these sort of losses will occur every year,” Neal said. “We model for them, we scenario build against them. So this is within the levels of expectations that we would think could happen for this type of loss.”
The insurance market chief, however, noted that while it is relatively straightforward to estimate the costs of the “obvious damage” to the ship and bridge, costs stemming from supply chain disruption are harder to predict in the immediate term.
