The cargo market has revised the amount it expects to pay out after a blaze ripped through a warehouse belonging to US luxury retail store chain Macy’s late last year.
Sources said the claim is now likely to cost about $78mn – down from initial estimates that the loss would cost at least $100mn.
The loss quantum is understood to have fallen after insurers took into account Black Friday discounts applied to goods held in the warehouse.
Sources said the extent of smoke damage would be key in determining the final claim quantum.
Munich Re wrote the primary $20mn layer of the cargo policy, which is brokered by the reinsurance group’s broking subsidiary Roanoke, according to sources.
The stock throughput policy has an excess of loss (XoL) placement with multiple layers, meaning the loss will be absorbed by a range of markets including several London market carriers.
The second $80mn xs $20mn layer of the placement is underwritten by several markets including CNA Hardy and Ironshore's Lloyd's managing agent Pembroke, this publication understands.
The XoL placement is understood to have at least one additional layer stretching above the $200mn mark.
The blaze tore through a Macy’s warehouse in Martinsburg, West Virginia on 25 November.
An undetermined number of packages are understood to have been burned or soaked.
Sources at the time suggested the Macy’s loss could push underwriters to review their participation on some large cargo accounts and the quantity of stock throughput business they write.
A spokesperson for Munich Re said the carrier does not comment on market rumours. CNA Hardy also declined to comment.
Pembroke and Macy’s had not responded to a request for comment at the time of publication.