London market sources said AI’s premium has just risen by around 10 per cent over the last last year premium when it had paid $30 million covering $20 billion of assets and liabilities for around 300 aircraft.
London/Mumbai:Post the Ahemedabad crash, Tata owned Air India might be facing hard times, but has mostly remained unaffected in its latest insurance renewal, thanks to overwhelming global re/insurance soft market.
Air India has completed its Apr1 renewal comfortably with minor increase in premiums, despite, facing a massive claims of of around $475 million (Rs 5000 crore) out of the Ahemedabad crash when one of its Ahemedabad-London flights had crashed, on June 12, 2025, minutes after its take off, resulting in 241 passenger fatalities and 29 ground deaths.
London market sources said AI’s premium has just risen by around 10 per cent over the last last year premium when it had paid $30 million covering $20 billion of assets and liabilities for around 300 aircraft.
The airline with 300 aircraft has a liability cover of $1.5 billion.
“They had to pay one time penalty during the renewal because of massive claims and effectively there are no hikes in premium charged by the same set of re/insurers who had insured the airline last year,”said sources in the London market.
The primary insurers for the Air India’s insurance policy are- Tata Aig General Insurance(lead insurer with 45 per cent share), ICICI Lombard General Insurance(7 per cent), New India Assurance(32 per cent), Oriental Insurance Company (14 per cent) and other PSU general insurers.
Almost 95 per cent of the Air India policy has been reinsured with a clutch of reinsurers led by AIG, Axa and Allianz. GIC Re also has a share in the policy including 4 per cent obligatory.
During the last year renewals, while the sum insured had increased from $12 billion to $20 billion, the premium outgo had remained unchanged at around $30 million.
Currently, Air India Group has nearly 300 aircraft — Air India has a fleet of around 187 planes, and Air India Express has over 110 planes. AI now has 22 Boeing 777s and 32 Boeing 787s.
While globally aviation insurance premiums were expected to inch up following a spate of accidents in 2025, Air India has managed to secure good rates. This is because of overall softness in aviation insurance market and deft negotiations by the company.
According to Willis, one of the leading global aviation brokers, though 2025 has proved difficult for airline insurers when claims have been frequent and costly, it’s worth noting that claims activity doesn’t directly reduce underwriting capacity because not all insurers are involved in every claim, either as lead or following market and abundant capacity has restrained the increased rates.
“The reality is that between 2021 and 2024, the airline book appears to have been broadly profitable for airline insurers, so there may be an opportunity to treat 2025 as a one-off, an “annus horribilis,” where previous results and current competition combined to suppress rate increases. If capacity remains buoyant, then this might be insurers’ only hope,” said Willis.