One year on: The impact of the Baltimore Bridge collapse on the marine (re)Insurance market

As we mark the one-year anniversary of the Baltimore Bridge collapse, the marine (re)insurance sector continues to assess the long-term implications of one of the most significant industry losses in recent years.

Market Reaction: Gradual Impact on Pricing

The timing of the collapse, just ahead of the 1.4.2024 renewals, meant that its impact was not immediately reflected in pricing. Given the proximity to renewal dates and the initial uncertainty about the magnitude of loss, the event was not taken into account for the renewal cycle. As the market approached mid-year renewals, reinsurers and retrocessionaires began adjusting to a higher loss expectation of $2 - $3 billion.  Whilst this was an early estimate, a market consensus formed in the 4th quarter around a $1.5 billion estimate, shaping expectations leading up to the 1.1.2025 renewals.

Despite the scale of the loss, overall market pricing moved only moderately. The 1.1.2025 renewals saw a gradual risk adjusted softening between flat to -10%; whereas without the Baltimore event, pricing may have declined further.

Richard Miller, Managing Director, Specialty Reinsurance at Howden Re said:

“While the loss acted as a stabilising force in an otherwise softening market, it did not trigger the widespread hardening that some anticipated. A combination of new entrants into the marine space, competitive pressures, and strong prior-year profitability allowed the market to absorb the loss without a significant correction. Rates at 1.4.25 followed a similar trajectory to what we observed at 1.1.2025, with a continuation of a downward trend.”

Immediate Adjustments in Facultative Placements

While the broader market absorbed the impact gradually, the secondary market experienced a more immediate reaction. Howden Re plays a significant role in this space, having placed a considerable portion of these risks.

The International Group of P&I Clubs placement, saw notable rate increases across all layers. Facultative placements followed the original pricing closely albeit in some cases rose considerably higher than the original rate movements, regardless of structure.

Miller noted: “This is where we saw the most immediate impact. Despite rate hikes, these deals continued to be placed, reflecting sustained demand for spreading exposure. This underscores the resilience of the secondary market in adjusting pricing to reflect emerging risk realities.”

What Would It Take to Harden the Market?

The muted pricing reaction to the Baltimore Bridge collapse raises an important question: if an event of this scale did not drive a hard market, what would?

“A few years ago, a loss of this magnitude would have hardened the market,” says Miller. "The difference today is the level of competition - there are simply more players competing for a finite book of business, diluting the impact of individual loss events.”

However, the question remains: could multiple significant losses or a single larger-scale event force a hardening?

“There is more capacity than ever looking to expand, and the industry's ability to absorb these losses - while keeping rates relatively stable - remains a key factor in mitigating widespread market correction,” comments Miller.

Historically, pricing is significantly influenced by large-scale pollution events and catastrophic loss of life. While the Baltimore collapse was a major insured loss, the absence of these two factors limited its ability to drive a broader market hardening. By contrast, a major environmental disaster, particularly in U.S. waters, or a large-scale casualty event could have significantly altered the market trajectory.

A Long-Tail Loss, But with Manageable Complexity

While the Baltimore Bridge collapse is a clear and substantial loss, the final settlement process will take years to resolve. Marine liability claims tend to have an extended resolution period, as evidenced by the 2019 Golden Ray claim, which remains open today. Its complexity - including legal fees, multiple claimants, investigations, and regulatory factors – continues to extend the timeline.

However, this loss differs from past events like the Costa Concordia in 2012, where logistical and legal delays drove costs significantly higher. The U.S. Army Corps of Engineers completed the Baltimore bridge wreck removal within weeks, avoiding prolonged complications.

“While claims from surrounding businesses remain a factor, the originally estimated $360 million loss of revenue during the rebuild period was significantly offset by increased toll revenues from neighbouring bridges and is now more likely to be in the region $50m - $100 million,” Miller explains. “This loss, while significant, is relatively clean in terms of known liabilities.”

Additionally, there is an expectation that the State of Maryland may bear some responsibility for a portion of the rebuild costs, since prior recommendations to update the bridge’s structure were not implemented before the accident. This could factor into discussions about the State’s liability.

A Brake on Softening Rates, Not a Reversal

Ultimately, the Baltimore Bridge collapse acted as a speed-bump on softening rates, but did not reverse the broader trend. The collapse, while substantial, highlights the complexities of marine liability claims and reinforces the importance of adaptability in a market increasingly shaped by emerging risks and the strategic role of the secondary market.

At Howden Re, we have positioned ourselves as a leader in the secondary market, shaping risk transfer strategies for marine clients and ensuring access to competitive pricing and capacity.

For further insights into Howden Re’s expertise in marine risk solutions, please contact our team.