A marine protection and indemnity insurer confirmed it is part of coverage for a container ship that hit a bridge in Baltimore, collapsing the bridge and causing unknown damage at this time.
“We can confirm that the ship Dali is entered with Britannia P&I Club,” the marine mutual said in a statement to BestWire. “We are working closely with the ship manager and relevant authorities to establish the facts and to help ensure that this situation is dealt with quickly and professionally.”
The container ship hit the Francis Scott Key Bridge in Baltimore at about 1:30 a.m. EST on March 26, crisis management firm MTI said in a statement sent to BestWire.
Grace Ocean Pte Ltd. owns the Singapore-flagged container ship “Dali,” and Synergy Marine manages the vessel.
“Reinsurers will bear the bulk of the insured cost of the collapse of the Francis Scott Key Bridge in Baltimore,” said Matilde Jakobsen, senior director, analytics, AM Best. “Liability cover for most shipping vessels is provided through protection and indemnity insurers known as
P&I Clubs.”
Jakobsen said the P&I segment is dominated by the members of the International Group of P&I Clubs, which collectively insure approximately 90% of the world’s ocean-going tonnage. As part of the International Group’s pooling arrangements, member clubs mutually reinsure each other by sharing claims above $10
million.
Additionally, the group buys general excess-of-loss reinsurance cover up to $3.1 billion in the open market, Jakobsen said.
“While the total cost of the bridge collapse and associated claims will not be clear for some time, it is likely to run into the billions of dollars — well above the $100 million attachment point for the GXL contract,” she said. “The insurance issues due to the collapse of the bridge will take a long time to determine and may involve several lines such as property, cargo, liability, trade credit and contingent business interruption. The claim will likely involve several insurers, reinsurers, subrogation, and legal issues and will serve to add to the
increasing challenges in reinsurance availability.”
According to MTI, the vessel collided with one of the pillars of the Francis Scott Key Bridge with two pilots onboard. All crew members, including the two pilots, have been accounted for and there are no reports of any injuries amongst the crew. There has also been no pollution reported.
At least six construction crew members on the bridge at the time of the collapse are missing, according to reports.
The Dali has an Indian crew of 22 and was outbound from Baltimore to Colombo, Sri Lanka.
The exact cause of the incident is yet to be determined, MTI said.
“The Dali has now mobilized its qualified individual incident response service,” MTI said. “The U.S. Coast Guard and local officials have been notified, and the owners and managers are fully cooperating with federal and state government agencies under an approved plan.”
Shipping firm A. P. Moller-Maersk confirmed the Dali is time chartered by the company.
“We are horrified by what has happened in Baltimore, and our thoughts are with all of those affected,” the company said in a statement to BestWire. “We can confirm that the container vessel ‘Dali,’ operated by charter vessel company Synergy Group, is time chartered by Maersk and is carrying Maersk customers’ cargo. No Maersk crew and personnel were onboard the vessel.
“We are closely following the investigations conducted by authorities and Synergy, and we will do our utmost to keep our customers informed,” Maersk said.
The shilling company said it does not own nor does it operate the vessel that has been involved in the Baltimore incident.
Despite a relatively benign year for pool claims in 2023, P&I clubs sought further price improvements at the February 2024 renewal, to keep up with claims inflation, according to a new report from AM Best.
The Best’s Market Segment Report, “P&I Clubs: Improving Underwriting Results but Further General Increases Needed to Keep Up With Inflation,” notes the general increases announced by P&I clubs for 2024 are slightly below those of the previous year (when some of the clubs applied increases up to 10%). AM Best considers the level of general increases necessary for clubs to maintain breakeven underwriting results in the face of inflationary economic conditions and the potential for a worse pool year to emerge in the future.
AM Best’s report also notes the International Group of P&I Clubs renewed its reinsurance program at a lower price and without wholesale cyber and pandemic exclusions being imposed by its reinsurers.