Costa Concordia recovery set to leave insurers with £700m bill

THE INSURANCE industry is facing a $1.1bn (£715m) bill for the recovery of the Costa Concordia cruise ship, Munich Re said yesterday.

The world’s biggest reinsurer said the entire $500m cost of the ship had already been covered but the rescue process continued to swallow funds. Munich Re said its final share of the bill for the ship, which sunk off the Italian coast in January 2012, had risen to €100m (£87m).

The company revealed the details alongside its second quarter results, which show profits fell a third after absorbing heavy losses from floods that hit central Europe in June.

Total damage claims for the three months to the end of June came to €605m, while low interest rates hit income from the company’s investment arm.

Despite this, chief executive Nikolaus von Bomhard insisted that the business is on track to meet its year-end target of €3bn.

“Unlike the first quarter of 2013, the second quarter was significantly affected by major losses,” he explained.

Von Bomhard added that the very different claims patterns between the first two quarters of 2013 “how careful one has to be in basing long-term result estimates on the basis of just one quarter”.