Suez blockage sparkles series of reinsurance claims

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The Suez Canal is now free for all transport ships but the financial consequences of the blockage are yet to be calculated, Reuters said. Insurers and reinsurers anticipate a pile of claims related to delayed traffic and deliveries of goods.

Those claims are seen adding to upward pressure on marine reinsurance rates, James Vickers, chair of reinsurance broker Willis Re International, told Reuters. Formal investigations began this week into how the giant container ship Ever Given ran aground in the canal, shutting down shipping in the major global waterway for almost a week. The incident and its impact on hundreds of ships delayed in the canal would be a “large loss” for insurance market Lloyd’s of London, its chairman Bruce Carnegie-Brown said this week, while Fitch Ratings said global reinsurers were likely to face hundreds of millions of euros of claims.

Vickers also said reinsurance losses were “not going to be a small amount of money”. The blockage was the latest in a growing number of man-made disasters leading to reinsurance losses, on top of a list of natural catastrophes in the past year, he said. Even before the Suez incident, the marine market “didn’t need much encouragement to keep going in an upward direction”, Vickers said.

Marine reinsurance premiums have been rising for the past few years after several years of falling rates, as Lloyd’s of London and other firms have cut back on loss-making lines, reducing competition. The Covid-19 pandemic has also put upward pressure on reinsurance rates across the board.

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