Insurers mop up after Costa Concordia grounding

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30 January 2012

Liability claims from the grounding of the Italian cruise ship Costa Concordia could be the single largest insurance loss in maritime history.

Damage to the ship’s hull and claims arising from personal injury, liability and environmental damage could tip losses over $US1 billion ($940 million), according to Moody’s Investment Service. This would make it the biggest maritime event since the 1989 Exxon Valdez disaster in Alaska.

The ship is insured for $US513 million ($483 million) by a host of insurers and reinsurers including Bermuda-based XL Group and Lancashire Holdings, UK company RSA, Italian insurer Generali, Munich Re and Hannover Re. Moody’s says reinsurers will cover the bulk of insurance claims.

The cost of liability claims hinges on the integrity of the ship’s hull, where any breach would trigger millions of dollars in pollution-related liability claims.

Norwegian marine specialist Gard is understood to have one of the largest exposures at $US60.8 million ($57.2 million).

Munich Re says its claims burden from the Coast Concordia disaster will be in the mid double-digit million euro range, while fellow reinsurer Hannover Re is expecting around €30 million ($37 million) in related claims.

Lancashire Holdings estimates between $US20 million ($18.8 million) and $US30 million ($28.2 million) in claims, while RSA has placed a figure of €10 million ($12.32 million).

The Costa Concordia was carrying 4200 passengers and crew when it hit rocks off Italy’s Giglio Island on January 13. Seventeen people are confirmed dead and another 16 are still missing.