Baltimore bridge collapse to affect direct pricing in marine space: Gallagher Specialty

The catastrophic collapse of the Francis Scott Key Bridge in Baltimore, caused by the allision of the MV Dali, has sent shockwaves through marine reinsurers and is expected to affect direct pricing in the marine space, according to Gallagher Specialty.

In its Marine Hull & Machinery and War Risks Market Report, Gallagher highlights 2024 as a particularly eventful year for the insurance industry, marked by major incidents reshaping the hull and war insurance landscape with wider implications for shipping and beyond.

Notably, the Baltimore bridge event is likely to be the largest marine insured loss in history and will no doubt be felt in the reinsurance world.

Gallagher predicts the event will notably affect direct pricing for P&I (Protection and Indemnity) and liability coverage, while hull will not be completely immune to the broader fallout.

The report also underscores escalating volatility in the war risks market, driven by the ongoing conflict between Russia and Ukraine and the intensifying crisis in the Red Sea. These developments have disrupted shipping and global supply chains, with shipowners facing higher premiums for certain war-risk transits and stricter protection requirements.

Many underwriters continue to cover vessels in the Black Sea and Russia-Ukraine regions with limited or no reinsurance protection due to the significant withdrawal of reinsurance capacity in 2023.

Gallagher also notes an extremely active Atlantic windstorm season and catastrophic flooding in parts of Europe in recent months.

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