The Air India plane crash in India in June, is likely to have a major impact on global aviation insurance premiums that are expected to rise by up to 30%, reported Bloomberg.
The plane crash on 12 June in the western city of Ahmedabad in India, killed 241 passengers and crew and over 30 persons on the ground and insurance claims are expected to cross $475m, said the report.
Air India had recently purchased a $20bn insurance cover for its entire fleet, that was underwritten by Tata AIG and backed by ICICI Lombard and the country’s public-sector insurers, with the entire risk syndicated to international reinsurers, primarily based in London. The airline pays around $30m in annual premiums for covering its entire fleet.
Aviation insurance typically includes coverage for aircraft damage (hull), war-related incidents, and liability for passengers and third parties. Following the crash, the liability cover for passenger compensation and third-party claims will be triggered under the Montreal Convention, which mandates airlines pay fixed damages without requiring proof of negligence.