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US News

Francis Scott Key Bridge collapse could total $4B in ‘largest marine insurance loss ever’

By
Ronny Reyes
Published March 28, 2024, 6:59 a.m. ET
The Singapore-flagged container ship Dali that crashed into the Francis Scott Key Bridge is bound to lead to a multi-billion dollar insurance loss, according to a chairperson of Lloyd's of London.
The Singapore-flagged container ship Dali that crashed into the Francis Scott Key Bridge is bound to lead to a multi-billion dollar insurance loss, according to a chairperson of Lloyd's of London. Getty Images

The collapse of Batimore’s Francis Scott Key Bridge could cost as much as $4 billion in claims — the largest marine insurance payout in history, analysts said.

Morningstar DBRS analysts estimated that the insured losses caused by the Dali cargo ship crash that has also shut down the bustling Port of Baltimore could total between $2 billion and $4 billion.

“We’re beginning to deploy resources in anticipation of this being a very substantial claim for the industry,” Lloyd’s of London Chairman Bruce Carnegie-Brown told CNBC’s “Squawk Box Europe” on Thursday.

The bridge collapse could lead to up to $4 billion in insurance claims, Morningstar DBRS said.
The bridge collapse could lead to up to $4 billion in insurance claims, Morningstar DBRS said. Unknown via Storyful

“It feels like a very substantial loss, potentially the largest-ever marine insured loss, but not outside parameters that we plan for,” he added.

Morningstar noted that the total cost will depend on how long the port is blocked, with the US Coast Guard working to free and dislodge the Singapore-flagged cargo ship from the Patapsco River as quickly as possible. 

The Port of Baltimore, the country’s 11th biggest, is the nation’s leading import and export site for cars, light trucks, and sugar, with a record 52.3 million tons of foreign cargo worth $80 billion transported through its doors last year. 

The cargo ship Dali is seen stuck under part of the structure of the Francis Scott Key Bridge after the ship hit the bridge on March 26, 2024, in Baltimore.
The cargo ship Dali is seen stuck under part of the structure of the Francis Scott Key Bridge after the ship hit the bridge on March 26, 2024, in Baltimore. AP

“A lot of business is going to be interrupted, supply chains are going to be interrupted by ships that are both trapped inside the port and of course, ships that were trying to gain access to the port that no longer can, and those second order effects will take some time to work through,” Carnegie-Brown said.

Along with the interruption to the port’s business, various insurance policies are expected to be triggered over liability, the Dali’s cargo, and the overall property damage. 

Six construction workers who were on break after filling potholes in the bridge are also presumed dead as a result of the collapse.  

Everything you need to know about the Francis Scott Key Bridge's collapse in Baltimore

  • The Dali, the Singapore-flagged container ship that smashed into the Francis Scott Key Bridge in Baltimore and destroyed it early Tuesday, reportedly lost propulsion and tried to warn officials that it was going to crash, according to a report.
  • Six people were unaccounted for, according to authorities. Two people were pulled from the river by rescuers.
  • Seven vehicles were missing after falling from the 1.6-mile-long span. Officials are using sonar technology to find the vehicles.
  • Videos show power on the ship flickering off, and then on again, shortly before the crash. Watch footage of the bridge’s collapse here.
  • A Baltimore resident described how the horrifying collapse of the Francis Scott Key Bridge early Tuesday caused his entire house to feel like it was falling down.
  • The Dali was also involved in a collision while leaving the Port of Antwerp, Belgium, in 2016.
The ship's path before the collision into Baltimore Key Bridge.
The ship’s path before the collision into Baltimore’s Key Bridge.

Follow along with The Post’s coverage of the Francis Scott Key Bridge collapse in Baltimore.

With Barclays also putting the potential insurance payout between $1 billion and $3 billion, the fallout from the Baltimore crash is expected to dwarf the record payout from the Costa Concordia cruise ship capsized in 2012, which resulted in a $1.5 billion payout. 

“Despite the hefty insured losses, we expect they will remain manageable for the insurance industry as they will involve a large and diversified pool of well-capitalized insurers and reinsurers,” Morningstar concluded of the impact. 

Lloyd’s, which has more than 50 member firms, reported a 2023 pre-tax profit of $13.49 billion on Thursday, boosted by strong underwriting and investment performance. 

With Post wires