Claims from passengers, possible oil spill costs and wreck removal—if the hull insurers abandon the ship—will have to be paid by the P&I Club system.

Reinsurer Hanover Re told Commercial Risk Europe that it will have to pay at least €10m. A Generali spokeswoman said: "Thanks to a prudent reinsurance policy the net impact of this specific claim will be small."

Carnival said that it will be left with a loss of between $85m and $95m, because the Costa Concordia or a replacement will probably not be available for cruises for the rest of the year. The owners also stated that the ship's insurance included a deductible of $30m.

The accident is one of the largest accidents to affect pure passenger shipping since the sinking of the Titanic.

The other two major ship losses, the Herald of Free Enterprise, which sank in the English Channel in 1987, and the Estonia, which sank in the Baltic Sea in 1994 when water entered through the bow gate, were ferries.

The other major damage to cruise ships in recent times took place mainly during construction such as the Diamond Princess—hit by a fire during construction in Japan—and the Pride of America, which sank while at the fitting-out quay in Bremerhaven in 2004, causing a loss of €175m.

The Costa Concordia sailed under class of Italian Registro Italiano Navale (Rina). Rina said that the ship had been ‘certified as meeting the highest safety standards’. All of the regular check-ups in 2011 had been carried out with a positive outcome.

Insurance industry experts cautioned about making premature judgements. It might take years before the exact course of events can be reconstructed, according to an insider. The case will not be helped by the fact that the ship was manoeuvred onto sand following the collision with the rock to help with the evacuation of the passengers.

If it transpires that the ship can be salvaged, the question arises whether the ship can be repaired and, if so, whether it would be economically viable to do so.

Cruise ships are expensive and complex vessels, with wiring and engines difficult to restore. "It also is a question if such a ship could ever sail again due to passenger worries," said a German expert. "Should it trade, any future accident might lead to an outcry and huge claims for compensation," he added.

If it is not possible to salvage the ship, or if the hull insurers abandon it and pay out the full sum insured, the wreck would have to be dismantled and disposed of on site. This would then be a matter for the P&I Clubs.

The record loss is by no means certain to change the course of the global marine hull market. Volker Bergeest of AGCS told CRE, "Market results in marine hull have not been good for years," he said. "Despite notable loss figures in recent years, the 2012 renewal has not brought price rises."

His explanation was: "There is too much capital, a result of the capital markets' bubble." The market had not seen a loss the size of the ‘Costa’ claim. "But we will have to wait and see whether this loss will really bring about a market turnaround," he added.

Hans-Christoph Enge of Bremen underwriting agency (Assekuradeur) Lampe & Schwartze shares such sentiments. "One of the reasons is that many insurers still saw underwriting profits despite the weak prices," he said.

But Mr Enge added that the accident might have a psychological effect on the market. "Shipping has been seen as a bullet-proof industry, but if a high-tech ship such as the Costa Concordia can suddenly cause such a loss, this makes people think," he said.

Mr Enge recalled an incident in 2004, when the cruise vessel Pride of America sank while at the fitting-out quay in Bremerhaven. "The €175m loss led to a dramatic turnaround of the global market for shipyard construction risks," he said.

The Costa Concordia is licensed to carry 4,890 persons, and is the largest cruise vessel sailing under the Italian flag. It was built by the Fincantieri shipyard group at the Sestri Cantieri shipyard in Genoa.

The ship is 290m long and had 1,520 cabins for 3,800 passengers. It also has 13 bars, five restaurants, three swimming pools, five jacuzzis and a Formula 1 simulator. It was named by the model Eva Herzigova on July 7, 2006.

The ship is part of a triple series, which Costa ordered at the shipyard in Genoa. In 2007, the Costa Serena was built and in 2009 the Costa Pacifica. Altogether the ships cost around €1.5bn. Costa ordered other ships and thus invested more than €5bn in recent years.

Equity analyst Joy Ferneyhough with Espirito Santo in London issued a note on the loss earlier this week that confirmed that, in her opinion, this would not be a major event for the international marine or wider insurance market but would add to the general pressure for firming rates.

“To put this in perspective we still await news from all Lloyd’s names (agencies) on the Thai floods which are expected to run to a $15bn industry loss vs. what appears to be a $500m–1bn loss for the insurance market on Costa Concordia. This will therefore be just another niggle on the loss line but certainly an earnings event (and a small one) vs. a capital event,” she said.

“Marine rates have been sluggish over recent years and any positive impact on rates post this loss will be welcomed by the Lloyds market particularly,” added Ms Ferneyhough.

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