The collapse of the Baltimore bridge is set to deal a significant blow to Hiscox, one of the biggest insurers in the Lloyd’s of London market. The company is expecting a $28 million hit from the disaster, which occurred in March when a cargo ship collided with the Francis Scott Key Bridge, resulting in six fatalities and causing major disruption at one of the busiest ports in the United States.
Aki Hussain, the chief executive of Hiscox, revealed that the estimated impact on the FTSE 250 company was based on a projected 2 billion loss to the wider industry. This would surpass the 1.5 billion paid out for the Costa Concordia cruise ship wreck off the Italian coast 12 years ago, making it the biggest marine insurance loss on record. The majority of the Baltimore loss has been recognised at Hiscox’s London market business, which operates at Lloyd’s, the world’s biggest insurance market. The remainder has been booked at the company’s reinsurance arm, as stated in the company’s first-half results on Wednesday.
Hiscox, although based in Bermuda, is a prominent name in the UK’s insurance industry. It boasts one of the oldest businesses in the Lloyd’s market, covering significant risks such as cyberattacks and natural disasters. The group also has a reinsurance and insurance-linked securities division, as well as retail operations providing policies for motor, home, and travel cover.
The Baltimore disaster is one of several major claim events faced by insurers this year, alongside the fallout from Hurricane Beryl and the global IT failure that caused widespread disruption to businesses, including airlines, shops, and banks last month. However, Hussain stated that the impact of the IT meltdown, caused by a botched software update from cybersecurity company Crowdstrike, was “immaterial to Hiscox” due to the nature of their policies and the geographical concentration of the disruption.
Despite these challenges, Hiscox’s pre-tax profits rose by 7.1 per cent to $283.5 million, although this fell short of City forecasts. Shares in the company fell by 21p, or 1.8 per cent, to £11.48 on Wednesday, following recent market speculation that Hiscox had attracted takeover interest. Tags: Hiscox, Baltimore Bridge Collapse, Lloyd’s of London, Marine Insurance, Hurricane Beryl, Crowdstrike IT Failure
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