Navigating Liability: Collision in the North Sea and Marine Insurance Fallout

On March 10, 2025, the MV Solong, a Portuguese-flagged cargo ship, collided with the MV Stena Immaculate, a tanker transporting jet fuel for the U.S. military, off the eastern coast of England in the North Sea. Both vessels sustained severe damage from the collision and the subsequent fire. Given the nature of the Stena Immaculate's cargo, the U.S. government has launched an investigation to rule out sabotage. The findings of this investigation could have significant implications for the handling of any insurance claims related to the incident.

Key Highlights
-- The collision between the Solong and the Stena Immaculate will activate multiple insurance policies, including those for hull and machinery, liability, and marine cargo.
-- We estimate that liability and salvage losses will exceed the cost of hull and cargo claims.
-- Total insured losses in the range of $100 million to $300 million will remain manageable for the global marine insurance industry.
-- However, this incident adds to our concerns regarding the profitability of this business line given substantial claims in 2024, including the collapse of the Baltimore Bridge and the Red Sea attacks.

"While the level of estimated losses resulting from this event is manageable for the global marine insurance industry, it raises concerns about the profitability of this business sector," says Marcos Alvarez, Managing Director, Global Financial Institution Ratings. "However, we do not expect this event to materially affect the credit profile of marine insurers in 2025."