Baltimore disaster could cause record losses, warns insurance chief | City & Business | Finance
Lloyd’s of London warns that the Baltimore bridge disaster is likely to cost billions and may well result in the highest marine insurance loss ever.
Although it said that it is too early to provide estimates as to the extent of the losses caused by the collapse of Baltimore’s Francis Scott Key Bridge and the subsequent blockage of the city’s port, insurance market Lloyds believes that they could eclipse those related to the 2012 sinking of the Costa Concordia cruise ship.
The Costa Concordia ran aground off the cost of Italy and marine losses from that event set a record of $1.5bnillion (£1.2billion). According to global credit ratings agency Morningstar, total insured losses are likely to range between £1.6 to £3.2billion.
John Neal, chief executive of the insurance and reinsurance market, said that it is working with its international partners and representatives on the ground to provide support where needed.
He added: “Our thoughts are with those affected by this devastating incident, particularly those who have lost their lives. Our priority in responding to catastrophic events is to convene the (re)insurance industry to support reconstruction and recovery efforts quickly.”
Although the underwriting performance of Lloyd’s marine, aviation and transport insurance market last year was hit by losses arising from the ongoing conflict between Russia and Ukraine, overall, its pre-tax profits for 2023 rocketed from £124million to £358million.
Lloyd’s said a strong underwriting performance and good investment returns helped drive the improvement in its fortunes. Its underwriting result, the difference between premiums collected and expenses incurred and claims paid out, more than doubled to £5.9billion. At the same time, its investment portfolio generated returns of £5.3billion, versus losses of £3.1billion in 2022.
Additionally, gross written premiums increased by 11.6% to £52.1billion, driven by volume growth of 4%. It added that price increases of 7% last year, which offset inflation, and that policy prices had increased for 24 consecutive quarters.
“The results we’re reporting are our best in recent history, with an outstanding underwriting result underpinned by a strong and resilient balance sheet,” Neal said.
