Baltimore a ‘complex and expensive loss’, but well inside Lloyd’s budget
The marine collision and bridge collapse in Baltimore represents “a complex and expensive loss” for the Lloyd's market, albeit well within the market's large-loss budget, but could also pay off as an example of the “value of insurance,” Lloyd's CEO John Neal has argued.
“The good news is that we can show the value of insurance in what is a complex and expensive loss,” Neal said in an answer that worked to skirt any early loss estimate.
Lloyd’s insures a plethora of risks subject to large loss incidents and even paid 11-13% of net earned premium for such losses during both 2021 and 2022 before finding relief in 2023. The five-year running average large loss ratio had been double-digit prior to the outlier reading of 3.5% in 2023.
“We anticipate a cost that will come from large individual risk losses or nat cat losses so this is not outside the normal levels or expectations of what we should see in a given year,” Neal said.
Neal expressed hope that the world of insurers that will be gathered to pony up for the array of claims pending will handle matters quietly and efficiently. Subrogation and other contentious matters are “something we should be able to do for ourselves”.
The portion of the claims that will run through the P&I clubs will clearly go chiefly to reinsurers, industry analysts have said.
The cargo ship which struck the Francis Scott Key bridge, the Dali, figures on the fleet listing of the Britannia P&I mutual shipowner insurance club, one of 12 constituent P&I clubs of the International Group of P&I clubs.
The International Group, for its part, last bought $3.1 billion in XoL liability reinsurance limit for the current year for sums above $100 million.
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