Baltimore Bridge's Losses Within Absorption Capacity of the Insurance Industry but Will Add Pressure to the Marine Market

Morningstar DBRS published a commentary discussing the potential implications of the collapse of the Francis Scott Key Bridge in Baltimore on the global insurance and reinsurance market.

Key highlights include the following:

-- The collapse of the Francis Scott Key Bridge and the subsequent blockage of the Port of Baltimore will trigger a large number of insurance policies, including marine liability and hull, property, cargo, and business interruption.

-- Depending on the length of the blockage and the nature of the business interruption coverage for the Port of Baltimore, insured losses could total between $2 billion and $4 billion, surpassing the record insured losses of the Costa Concordia catastrophe.

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

“In our view, these losses will add to the woes of marine insurers who have been facing recent challenges due to the Houthi rebels’ attacks in the Red Sea,” said Marcos Alvarez, Managing Director. “We also anticipate that the losses linked to the collapse of the Baltimore bridge will add upward pressure to the pricing of marine insurance coverages globally.”