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MV Dali claim exhausts IG P&I reinsurance limit and triggers overspill
A midyear review says about $300 million of overspill reinsurance remains, while losses are expected to continue developing beyond $2.8 billion.
The MV Dali has become the largest single casualty to hit the protection and indemnity, or P&I, insurance market after its March 2024 collision with Baltimore's Francis Scott Key Bridge generated a claim now reserved at more than $2.8 billion, according to Insurance Business.
That loss has exhausted the IG group reinsurance limit and moved exposure into a collective overspill layer, a protection mechanism that has never previously been called upon. Insurance Business notes that no overspill call has yet been triggered because around $300 million of overspill reinsurance protection remains available to absorb the exposure without requiring member clubs to levy charges against shipowner members.
The situation was complicated when a reinsurer initially declined to pay $180 million of that protection. The clubs temporarily funded the shortfall for their members until the reinsurer later agreed to cover the claim, Insurance Business said, adding that an inability to bridge the gap would have forced an overspill call with additional member charges.
Gallagher Specialty's midyear review, as summarized by Insurance Business, says the Dali loss is expected to develop beyond $2.8 billion. It also reports that the IG's combined underwriting loss for 2025 to 2026 was $248.5 million, a 28% improvement versus the prior year's $352 million deficit, and that investment income of $1.13 billion helped drive free reserves to an all-time high of $6.8 billion, with programme limits raised to $3.35 billion at the February renewal and 2027 to 2028 pricing described as unresolved.