Britannia P&I, the protection and indemnity provider for the ship that destroyed a bridge in Baltimore, on Thursday reported strong investment returns to boost its financial reserves.
The London-based club reported an investment return of $63.5m for 2023/24 but an underwriting loss of $5.3m.
Britannia P&I said on Thursday that it remained in “robust financial shape” with free reserves growing to $549.9m to February 2024, compared with $501.7m a year earlier.
The expected record maritime insurance claim that followed the 9,962-teu Dali (built 2015) hitting the Francis Scott Key Bridge in Baltimore in March is not reflected in the current figures.
Years of legal wrangling are expected to decide who will shoulder the bulk of the costs in the case with some estimates suggesting costs will rise to $4bn.
The club said that the presumption of liability in such cases rested with the ship but “the quantum of any loss and final liability are yet to be determined”.
Claims arising from the incident will fall within the 2024/25 policy year, the Britannia P&I said in its annual report.
“Any claim involving the loss of life is tragic and my thoughts are with all involved,” Britannia P&I chairman Anthony Firmin said.
“In the meantime, our members continue to co-operate with all authorities.”
The latest figures showed an improvement in underwriting results but still running at a loss despite a generally benign year of claims reported by clubs.
Britannia P&I reported a combined ratio of 102%, an improvement from the 107% from the previous year. A combined ratio of more than 100% reflects an underwriting loss. Owned tonnage at renewal in February remained steady at 141.7m gt.
Calls and premiums were $288.8m, up from $258.1m the previous year. The club said there were 20 claims of more than $1m in the 2023/24 year, in line with the five-year average. But it said the total claim value of $75m was 12.5% higher than average.
Clubs have responsibility for the first $10m of any single claim. Larger claims are dealt with through the pooling system of the International Group of P&I clubs along with internal and external reinsurers to a limit of $3.1bn.
Experts say the broader financial implications for Britannia P&I and other P&I clubs from the Dali disaster are linked to the success of a legal claim by the ship’s owner and manager to limit their financial liabilities.
The vessel’s owner, Grace Ocean, and manager, Synergy Marine, have applied to the US courts to limit their liability to $44m, a move that the Baltimore authorities have vowed to fight.
If the limitation claim is unsuccessful and the cost of the Dali disaster tops the $3.1bn reinsurance upper limit, further costs will return to the International Group to collect from members.
Investigators are looking into four power outages on the ship, two on the day of the crash and two the day before, to try to pinpoint the reasons for the loss of control. The Baltimore authorities say the ship was not fit to leave for Sri Lanka.
Six construction workers died when the ship collapsed, closing shipping lanes for weeks.
Read more
- US bridge closed after MSC container ship lost control at ‘full throttle’
- Why the risk of a Baltimore bridge-style disaster happening again is ‘higher than you think’
- Crew on Baltimore bridge crash ship hope to go home after refloating and return to port
- Stricken container vessel to be pulled clear of broken Baltimore bridge to open key shipping lanes
- No fuel problems found in Dali bridge crash investigation
