London insurers face Baltimore bridge payouts worth billions

Insurers face claims of as much as $3 billion following Tuesday’s collapse of the Francis Scott Key Bridge in Baltimore, with firms on the Lloyd’s of London market most exposed, Barclays Plc analysts said.

Insurance claims for damage to the bridge alone could reach $1.2 billion, the bank said in a note, predicting further potential liabilities of $350 million to $700 million for wrongful deaths and yet-to-be-determined amounts for business interruptions while access to the city’s port is blocked.

“While the incident still has to be investigated, we believe it has potential to become a significant insurance claim, particularly in the marine market,” wrote Ivan Bokhmat and colleagues.

The bridge collapsed Tuesday after being struck by a container ship, the Singapore-flagged Dali, sending vehicles into the water and threatening chaos at one of the most important ports on the US East Coast.

Insurance risk will be spread across firms due it being syndicated, the Barclays analysts said, noting the policy was led by AXA XL. Other major marine reinsurers include Hannover Re, Swiss Re AG, Munich Re and RenaissanceRe. The significant involvement of Lloyd’s of London may make smaller London Market reinsurers comparatively more exposed, they added.