Validus: May Pay Up To $65 Million For Costa Concordia Shipwreck
February 02 2012 - 6:00PM
Dow Jones News
Insurer Validus Holdings Ltd. (VR) said it may be on the hook
for $50 million to $65 million because of the Costa Concordia
shipwreck, a loss that could eclipse its payout from the widespread
flooding that crippled Thailand late last year.
Validus's estimate of its own losses are based on its prediction
that the total insured payout on the shipwreck will be $845 million
to $950 million, meaning the Bermuda-based company expects to
shoulder about 15% of the industrywide loss.
The Costa Concordia ran aground and came to rest on its side off
the Tuscan island of Giglio on Jan. 13 after the ship's captain
veered from his approved course and gashed the ship's hull on a
reef. More than a dozen people are confirmed dead.
Carnival Corp. (CCL), the parent of the company that operated
the Costa Concordia, said this week the wreck will lower its own
net income by $155 million to $175 million in fiscal 2012.
For Validus, the estimated loss is in the neighborhood of its
$54.1 million fourth-quarter net loss from flooding in Thailand.
The insurance industry is estimated to be on the hook for $10
billion to $12 billion in Thai losses, making it one of the most
expensive disasters in a catastrophe-heavy year.
The Validus estimate of its Costa Concorida loss is also on par
with the $52.4 million net loss in last year's first quarter from
the mooring failure of the Gryphon Alpha, a floating oil storage
and offloading facility in the North Sea.
But it's much less than Validus's $148.9 million in
first-quarter losses from last year's earthquake in Japan.
Despite last year's spate of disasters, Validus eked out net
income of $27.3 million in 2011.
-By Erik Holm, Dow Jones Newswires; 212-416-2892;
erik.holm@dowjones.com
Validus Holdings, Ltd. (delisted) (NYSE:VR)
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