Egypt Red Sea Accident and Insurance Industry Response - May 1996

Egypt Red Sea Accident and Insurance Industry Response - May 1996
In January 1996, the luxury cruise ship Royal Viking Sun collided with a coral reef near Rasa Muhammad National Park in Egypt's Red Sea, destroying approximately 2,000 square meters of the reef. The accident severely affected coral species endemic to the Red Sea and the surrounding biodiversity, and is expected to reduce tourism revenues by approximately $50 million per year. The insurance industry provided approximately 2.5 billion yen in compensation, with Lloyd's of London playing a key role in the response. The Egyptian government initiated a coral reef restoration project with the support of UNEP, which has achieved about 50% recovery using artificial corals and transplantation techniques. The accident triggered a review of environmental liability insurance and international marine protection policies, and provided lessons for achieving a sustainable tourism model.