According to GlobalData, US insurers may expect their profitability to be substantially unaffected by the expected rise in claims caused by the collapse of the Baltimore Bridge. We estimate the average loss ratio to remain unchanged at 78.8% from 2024 to 2028.
A watershed moment in United States maritime history occurred on March 26, when the container ship Dali collided with the Francis Scott Key Bridge in Baltimore, leading to the disastrous collapse of the old bridge. The catastrophe is expected to raise insurance claims in multiple areas, including property, liability, and marine, aviation, and transportation (MAT) policies.
An insurance analyst at GlobalData named Manogna Vangari emphasized the significance of Baltimore, one of the major US ports.
Thanks to the bridge collapse, the port will be closed until May 2024. According to Vangari, local insurers and reinsurers should brace themselves for a surge in insurance claims due to disruptions in company operations, supply chains, the possibility of accidental deaths, and marine insurance policyholders’ protection in the event of a collapse.
The company’s insurance database predicts that in 2024, property insurance claims will cost 200.7 billion dollars, while auto insurance claims will cost $247.7 billion. This accounts for 11.9% of the total general insurance claims in the US.
We anticipate that liability and MAT insurance claims will cover the remaining 6.6% and 1.3% of the total, or $110.8 billion and $22.7 billion, respectively. Upon evaluating the full extent of the disaster, the actual claims for 2024 may significantly increase.
According to reports, this catastrophe could surpass the losses from the 2012 Costa Concordia disaster and become one of the biggest maritime insurance claims in history. Reinsurers in the reinsurance pool of the International Group of Protection and Indemnity (P&I) Clubs will take up a large portion of these insured losses. This is unlikely to significantly affect their profitability.
The public health and insurance (P&I) organizations that insure ships are about to experience massive financial losses as a group. This insurance covers things like maritime accidents and private injuries.
Premiums for MAT, liability, and property insurance policies are likely to rise in the near future as insurers reassess their risk exposure and make adjustments to premiums in order to remain profitable, according to Vangari.
Accordingly, experts predict that the US general insurance market will expand from $2.4 trillion in 2024 to $3.3 trillion in 2028, a CAGR (compound annual growth rate) of 8.9 percent.
U.S. insurers and reinsurers may face more claims than expected in 2024 as a result of the horrific Baltimore Bridge disaster. “This incident will demonstrate how important it is to have enough liability and marine insurance, which could help these lines grow over the next five years,” Vangari stated.
