The collapse of Baltimore’s Francis Scott Key Bridge is expected to result in a multibillion-dollar insurance claim, according to Lloyd’s of London’s chairman.

On Tuesday, the large Singapore-flagged container ship Dali, which was going from Baltimore Harbour to Sri Lanka, reported losing power and manoeuvrability before colliding with a bridge support pylon.

The impact threw the majority of the bridge into the mouth of the Patapsco River, shutting shipping routes and forcing the indefinite closure of Baltimore’s Port, one of the busiest on the Eastern Seaboard.

Morningstar DBRS estimated that the incident might result in up to $4 billion in insurance claims.

Bruce Carnegie-Brown told Reuters that it was too early to estimate the entire insurance loss, but that he would be “very surprised” if the accident did not result in a multi-billion dollar loss, adding that “the tragedy has the capacity to become the largest single marine insurance loss ever”.

The previous record marine loss occurred in 2012 with the Costa Concordia luxury cruise liner accident.

Lloyd’s, which has over 50 member businesses, is active in the marine and property insurance markets, both of which are expected to face significant claims as a result of the bridge damage and port interruption.

In 2022, Lloyd’s had gross written premiums for marine, aviation, and transportation insurance and reinsurance totaling more than 6 billion pounds ($7.5 billion). North America is its biggest market.

U.S. stocks finished higher on Wednesday, with the S&P 500 reaching another closing record ahead of Friday’s important inflation report.

Carnegie-Brown also stated that the insurer had set up 1.6 billion pounds ($2 billion) in reserves over the last two years for contested aviation claims involving planes delayed in Russia following the invasion of Ukraine.

Carnegie-Brown said talks between aviation leasing companies and insurers to settle the multi-billion dollar claims were at a “reasonably advanced stage” ahead of key court trials in Dublin and London this year.

(Adapted from TheGuardian.com)