Concordia Insurance Claims May Touch $1 Billion If It Sinks

By Beth Jinks - Jan 16, 2012 7:50 PM ET
The insurance costs related to the sinking of Carnival Corp. (CCL)’s Costa Concordia off the coast of Italy may reach $1 billion once environmental damage and injuries are added to the count, Moody’s Investors Service said.

The shipwreck “marks the first major insured loss of 2012 and will result in a drag on first-quarter 2012 earnings for affected firms,” Moody’s Senior Credit Officer James Eck wrote in a note published today.

While damage to the ship will cost around $500 million, other items like personal injury and liability and environmental losses may bring up the final bill, the report said. Reinsurers will likely take on most of the burden, Moody’s said.

In a separate report, Jefferies International Ltd. estimated the total cost at 650 million euros ($850 million).

The Costa Concordia, carrying 4,200 passengers and crew for a Mediterranean cruise, struck rocks and ran aground off Italy’s small Giglio Island on Jan. 13. The accident resulted in the sinking of the ship, leaving 15 dead and 24 still missing.