Reinsurers Could Face $2B in Claims Over the Ever Given Grounding
Claims related to the infamous grounding of the boxship Ever Given last year could amount to a staggering $2 billion, according to French insurer Scor SE, and the massive cost will largely be borne by the reinsurance sector.
The Ever Given went aground in the Suez Canal on March 23, 2021, shortly after she entered the southern entrance. The grounding occurred in a high wind event, and the strong south wind, low visibility and BRM challenges may have been contributing factors. In a complex salvage operation involving hundreds of people, shore-based excavating equipment, full-size cutter suction dredgers and at least 10 tugs, the ship was refloated on March 29.
In the interim, up to 400 ships had their voyages disrupted by the shutdown of the canal. The effects rippled out in the form of delays for cargoes bound for ports in Europe, the U.S. East Coast and beyond. Some vessel operators even considered rerouting shipments to the south, around the Cape of Good Hope.
Hundreds of parties were affected, including cargo interests, charterers, shipowners and the Suez Canal Authority itself. Depending on their role in the maritime ecosystem, they suffered a wide range of damages - salvage costs, business interruption, loss of revenue, lost perishable cargoes and more. The insurance claims arising from the incident will take years to work out, according to Scor.
“The big lesson is that some sand and wind can potentially cause a tragedy of global proportions. This demonstrates the fragility of our economic and social models," said Sylvain Gauden, Chief Underwriting Officer, Marine and Energy, Reinsurance for Scor. “The grounding of the giant Ever Given has shown the world the hidden reality of our economic system."