Filed Under:Markets, Commercial Lines

Carnival Posts $851M Insurance Recoverables from Costa Concordia

The grounded cruise ship Costa Concordia off the Tuscan island of Giglio, Italy, on Jan. 24. (AP Photo/Pier Paolo Cito)
The grounded cruise ship Costa Concordia off the Tuscan island of Giglio, Italy, on Jan. 24. (AP Photo/Pier Paolo Cito)

NU Online News Service, April 2, 1:46 p.m. EST

Carnival Corp. lists $851 million in insurance recoverables among its assets for the 2012 first quarter, according to a filing with U.S. Securities and Exchange Commission.

Carnival says “substantially all” of the insurance recoverables relate to the Costa Concordia, which ran aground and capsized off the island of Giglio, Italy, on Jan. 13.

The Wreck of the Costa Concordia -- Slideshow

The cruise-ship company early in March reported a $139 million 2011 first-quarter net loss before detailing its earnings in an SEC filing March 30.

Much of the insurance recoverables relate to the company writing off the $515 million value of the Costa Concordia because it was deemed a total loss. Carnival says it doesn’t face hull and machinery insurance deductibles.

Carnival did face a $10 million deductible for third-party personal-injury liabilities, which is included in $29 million in Costa Concordia-related expenses not covered by insurance during the first quarter.

 Due to its insurance coverage, Carnival says it doesn’t expect future expenses from the Costa Concordia disaster to affect operations.

“We expect to continue to incur Costa Concordia-related costs in the future,” Carnival says. “Although at this time these costs are not yet determinable, we do not expect them to have a significant impact on our results of operations because we believe these additional costs will be recoverable under our insurance coverage.”

Asked during a conference call last month whether he was comfortable that Carnival’s insurance coverage will cover all eventualities, Howard S. Frank, Carnival’s chief operating officer said, “Yes. We’re comfortable.”

Carnival says in the SEC filing that it has coverage for third-party claims related to personal injury, loss of life, loss or damage to personal property, business interruption or environmental damage. In a closer look at litigation, Carnival acknowledges the various lawsuits against it, but reasserts its outlook that many of the claims are covered by insurance. Any remaining liability “is typically covered by our self-insurance retention levels,” Carnival adds.

Insured losses appear to be quickly approaching the $1 billion mark predicted by Moody’s Investors Service.

Featured Video

Most Recent Videos

Video Library ››

Top Story

20 best cars for the money in 2017

Help your insurance clients find a vehicle that's a good value and posseses the comfort, features and quality performance everyone wants.

Top Story

10 states with the highest and lowest homeowners' insurance rates

The average cost of homeowners' insurance varies widely across the U.S. How do the rates in your state compare?

More Resources

Comments

eNewsletter Sign Up

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Mobile Phone

Advertisement. Closing in 15 seconds.