Amlin estimates pay out on cruise disaster

published 7 February 2012

Insurance and reinsurance company Amlin has estimated that its worst case position resulting from the grounding of the cruise ship Costa Concordia would be less than £10m, net of reinsurance recoveries.

The shipwreck has led to market claim estimates of $500m to $1bn for the cost of damage to the vessel and further losses from passenger liability claims, removal of wreck and potential environmental claims, the firm said in a trading update.

Amlin currently has a written total income year-to-date of £746.4m, net of brokerage, a 19.2% increase on the prior year, while overall renewal rates for the group have increased by 4.0% (January 2011: decreased by 1.3%).

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Unprecedented catastrophe loss activity in 2011 has prompted a notable uplift in reinsurance rates, the firm said.

"At January 1st, our international catastrophe accounts, written within the London Reinsurance business and Amlin Bermuda, experienced average rate increases of 15.9%. Our US catastrophe book improved by 14.5%.

"Income levels have also been boosted by Amlin Re Europe, which at the start of its second full year of trading, has increased its gross written premium, net of brokerage, to £125m (January 2011: £55.6m)."

The scale of insured damage arising from the flooding in Thailand remains uncertain, with current insured loss estimates ranging between $8bn and $20bn.

Amlin estimates that the property and catastrophe reinsurance account claims will be between £50 and £70m, net of reinsurance recoveries.