With claims expected to reach US$475 million from the Air India disaster, annual premiums could be pushed skywards for airlines worldwide
Indian insurance policy sellers expect the cost of coverage for airlines to spike as much as 30 per cent after the deadliest aviation crash in more than a decade.
Sajja Praveen Chowdary, director at Indian broker Policybazaar, expects premiums for hull, war-risk and liability coverage to increase by 10 per cent to 30 per cent in the next renewal cycle. Rohit Boda, group managing director at broker J.B.Boda Group, predicts a rise of 10 per cent to 25 per cent.
Insurance claims for the Air India crash are expected to be in the realm of US$475 million, including those for the aircraft’s hull and engine as well as additional liability for loss of life. Air India’s fleet is insured for about US$20 billion in total, with an annual premium near US$30 million, according to data from Policybazaar.
“A catastrophe of this scale will contribute to hardening of global rates,” said Chowdary, director at Policybazaar for Business.
