MOL Comfort incident to cost insurers between US$300 million - $400 million claims

By Finance

MOL COMFORT sinking is leading to estimated claims of US$300 million - $400 million to cargo insurers. The tragic cargo ship that broke in two lost almost all of the cargo that was carrying. The stern of MOL COMFORT sank in June this year somewhere in the Indian ocean while the front was under tow but caught fire and went under water in July off Yemen.

The value of the containers that were on board the ship is taken on the average of the contents. It is told that MOL COMFORT was transporting boxes containing consumer electronics and expensive clothing for markets in Western Europe. A single container is estimated to be insured from the interval between $50,000 and $1 million.

Mitsui OSK Lines has insured for $66 million the hull and the machinery of MOL COMFORT, with Mitsui Sumitomo having a 77% share, Tokio Marine 20% and the last 3% for Sompo. Insurers from United Kingdom and Japan have received many claims but the most of the claims are forwarded to the Japanese side.

Generally losses are not so crushing for the insurers. The location of the incident was in the Indian ocean so it is far from angry headlines and any kind of government reaction, all sort of things that can rise the cost of the losses. If we compare the results with COSTA CONCORDIA $1.2bn or RENA $400million it will not affect the market.

The flames on the ship did not allowed the offloading of all 4,328 boxes, although this operation would be expensive and would take too much time for accomplishing. The final destination of MOL COMFORT was the port of Rotterdam and ports in Germany, France so value of the lost cargo could make the loss much higher.
Mitsui OSK Lines has 2 more ships that in the past had 2 serious incidents - The MOL Discovery grounded 6 years ago in the Gulf of Suez and the second ship MOL Renaissance had serious problems with fire 7 years ago that led to general average being declared.