Total insured losses from a collision between a cargo ship and a fuel tanker in the North Sea could reach $US100-$US300 million ($158-$474 million), according to Morningstar DBRS.

“While this level of estimated losses is manageable for the global marine insurance industry, it raises concerns about the profitability of this business sector,” the credit ratings agency says in a report.

“This is particularly true considering significant losses incurred from the collision of the cargo container ship Dali with the Francis Scott Key Bridge in Baltimore early last year, as well as ongoing challenges with maritime traffic around the Red Sea and the Suez Canal.”

The crash is not expected to materially affect the credit profile of marine insurers this year.

The Portuguese-flagged cargo ship MV Solong collided with the MV Stena Immaculate, a tanker transporting jet fuel for the US military, off the east coast of England on March 10. Both vessels sustained severe damage from the impact and following fire. 

The cause of the crash and details about insurance policies are still unclear, but the incident is expected to activate hull and machinery, protection and indemnity, and marine cargo coverages, the report says.

It estimates liability and salvage losses will exceed the cost of hull and cargo claims.

The Stena Immaculate was part of a US government tanker security program that contracts commercial vessels to transport fuel for the military.

Morningstar DBRS says marine traffic tracking data indicates the Stena Immaculate was anchored at the time of the incident and the US government has launched an investigation to rule out sabotage.  

The probe’s findings could have significant implications for the handling of claims, it says.