Bridge collapse in Baltimore could cost the insurance market up to $4 billion

The collapse of the bridge Francis Scott Keyin Baltimore, in the United States, which collapsed in the early hours of Tuesday (26), after having one of the support pillars hit by a 32 thousand ton container ship, could result in up to US$4 billion (or R$20 billion) in insured losses, according to analysts at Morningstar DBRS, a global credit rating agency, reports Reinsurance News, a portal specializing in reinsurance (the “insurance of insurance”).

The estimate was calculated by considering how long the Port of Baltimore will be blocked after the bridge collapse and the space’s business interruption coverage. Reconstruction of the bridge alone could cost around US$600 million (approximately R$3 billion).

Even at the lower end of the range of insured losses, it would still exceed the US$1.5 billion (or R$7.5 billion) of insured losses generated by the Costa Concordia, an Italian vessel that sank in 2012 during a cruise, and became the record number of insured marine losses.

According to the international press specializing in the sector, “the duration of the blockade is not yet clear, but there is concern that it could be the biggest example of a port blockade seen by the insurance market in recent years”.

The expectation is that “a large number” of policies (contracts) will be activated, including compensation for civil liability, hull, property, cargo and business interruption. Despite the “record maritime insured loss”, analysts at the rating credit providers expect the “loss” to remain within the limits of market capacity.

“It is being perceived as a very substantial loss, potentially the largest maritime loss ever insured, although not outside the parameters we planned,” Bruce Carnegie-Brown, president of British insurer Lloyd’s of London, told American broadcaster CNBC.

Numbers

Baltimore is the 11th largest US port in terms of container movement, but leads in automobile exports, having handled more than 750,000 vehicles in 2023, according to data from the Maryland Port Administration.

According to Reuters, it is also the largest US port by volume for moving agricultural and construction machinery, as well as agricultural products, and also operates a cruise terminal. It was, for example, the second busiest port for coal exports last year.

When the bridge collapsed, it threw people and cars into the river. According to the international press, eight people were on the bridge at the time – but only two were rescued alive.