Dali Incident Could Be Largest Ever Single Marine Insurance Loss
Britannia, the insurer of container ship the Dali, is working with the vessel's owner and U.S. authorities on the investigation into the collapse of Baltimore's Francis Scott Key Bridge, the insurer said on Thursday.
The bridge collapsed on Tuesday after the Dali suffered a power outage and struck a pylon, causing huge disruption in the port.
"We are working closely with the vessel's owner and manager and the relevant U.S. authorities as part of the investigation into the casualty," Britannia said in a statement.
The disaster is likely to result in industry-wide multi-billion-dollar insurance claims, which could make it the largest single marine insurance loss, Lloyd's of London chairperson Bruce Carnegie-Brown told Reuters earlier on Thursday.
Ship liability insurance, which covers marine environmental damage and injury, is provided through protection and indemnity insurers such as Britannia, known as P&I Clubs.
Britannia declined to comment further, "during this phase of the investigation".
The International Group of P&I Clubs collectively insures approximately 90% of the world's ocean-going tonnage and member P&I clubs mutually reinsure each other by sharing claims above $10 million. The group holds reinsurance cover up to the value of $3.1 billion.
The P&I Clubs may be liable for issues such as the repair of the bridge and clearance of the wreckage, one industry source said.
French insurer AXA will not have major losses from the Baltimore bridge collapse, it said on Thursday.
AXA's commercial insurance unit AXA XL is lead underwriter on the P&I reinsurance policy.
Reinsurers - who insure the insurers - in the London market and major European players such Swiss Re and Hannover Re are likely to face claims, industry sources say. Swiss Re and Hannover Re declined to comment.
Another industry source said the European reinsurers and the Bermuda reinsurance market - another pool of capital - would be most exposed for much of the P&I related liability.
"It will be the big continental Europe and Bermuda reinsurers who will be hit," the source said. "It won't be too bad for Lloyd's."
The source said much would also depend on the extent of disruptions, adding that business interruption claims would also be part of the exposure with ships that were blocked.
Over 30 vessels were still stuck inside Baltimore port, which included tugs, pleasure craft as well as ocean going vessels such as dry bulk ships and a container vessel, shipping data showed.
There were also at least 10 commercial ships anchored outside of Baltimore waiting to enter, data from ship tracking provider MarineTraffic showed on Thursday.
Tradepoint Atlantic, one of Baltimore's terminal especially for car carriers, said on Wednesday said its global logistics center had resumed full operations, adding that the first cargo had arrived since the accident on Tuesday.
(Reuters - Reporting by Jonathan Saul, Carolyn Cohn, Alexander Huebner, Paul Arnold and Polina Devitt; editing by Mark Heinrich, Chizu Nomiyama and Ros Russell)