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Costa Concordia - the worst maritime loss in insurance history?

The Italian cruise ship, which struck rocks in shallow water off Italy's western coast on 13 January,  is at the centre of an insurance process that could result in losses of over $1billion, according to industry experts.

The ship, which was insured for $513million, was carrying 4,000 passengers and crew when it capsized.  More than ten people have lost their lives in the disaster and dozens more have been injured.

Two of the world's leading insurers, RSA and Allianz provide cover for the ship.  Due to the complicated nature of maritime insurance, it will take some time to come to any conclusions surrounding loss or liability issues. The total loss will depend on the removal of wreck charges, liability claims and any environmental claims that may arise if there is an oil spill.  A spokesperson from Allianz confirmed, "It usually takes months - and in case of liability claims - probably years of investigation to completely settle large marine claims."

Whilst the Costa Concordia disaster will mean a huge loss for insurers, analysts and brokers have said insurers' capital reserves remain robust, despite absorbing over $100 billion of natural catastrophe losses in 2011, making it the industry's second costliest natural disaster year ever.

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