North Sea shipping crash expected insured losses manageable: DBRS

By Michael Jones

March 12 - (The Insurer) - Insured losses from the March 10 North Sea shipping crash will likely total between $100 million and $300 million and be manageable for the industry, DBRS Morningstar has estimated

• North Sea incident will not affect credit profile of marine insurers in 2025

• $50 million to $100 million for vessels’ insured values, plus salvage costs

• Most of the financial losses to fall on P&I market, DBRS

In a note published on Wednesday, DRBS Morningstar said the combined insured value of the Stena Immaculate and Solong would likely be between $50 million and $100 million, including the potential costs of salvage operations.

Three senior market sources said the Stena Immaculate has an insured value of around $43 million , while two of these sources said that the Solong’s insured value is $6.5 million to $7.5 million.

DBRS Morningstar said the vessel owners will likely file claims under cargo insurance policies for any losses incurred.

“We do not expect this event to materially affect the credit profile of marine insurers in 2025”, said DBRS Morningstar.

However, it expects litigation to occur between the involved parties over legal responsibility, which it said will activate subrogation clauses. If either party is deemed liable, cargo insurers may recover losses from the relevant ship’s liability insurers.

British police arrested a man in connection with Monday’s collision on March 11, who the BBC reported was the captain of the Solong.

The note said that most financial losses will fall under P&I policies because of potential cleaning costs associated with any pollutant spill.

“Depending on the volume of chemicals and fuel released into the ocean, recovery and cleaning costs could significantly exceed claims made under the H&M policy, even if both vessels are declared a total loss”, the commentary said.

Two marine market sources said on March 11 that a significant proportion of the Stena Immaculate’s jet fuel cargo remained onboard. They said this had contributed to expectations that the pollution element of the claim is unlikely to exceed the P&I club’s retention.

An International Group of P&I Club member retains the first $10 million in losses from an event, while losses up to $100 million in excess of $10 million are shared between the 12 clubs.

Losses in excess of $100 million and up to $3 billion are taken on by the excess-of-loss reinsurance market. Two marine reinsurance market sources said they did not expect this loss to hit the liability reinsurance market.