The Pakistan International Airlines (PIA) Airbus SE A320 jet that crashed into a crowded residential district of Karachi last week killing 97 people on board was insured for $19.7 million, an airline document showed.
Insurance industry sources said the insurance was reinsured into international reinsurance markets.One source familiar with the matter said AIG was the lead reinsurer.
AIG did not respond immediately to a request for comment.
Pakistan’s National Insurance Company Ltd was the insurer and Marsh was the reinsurance broker for PIA’s annual policy that runs until Dec. 29, the document on the airline’s website showed.
The NICL had insured the entire fleet of aircraft “owned or operated” by the PIA for the period between Dec 30, 2019 and Dec 29, 2020, according to the certificate of insurance posted on the PIA website.
“The hull insurance of [the aircraft] AP-BLD 2274 is US$19.7 million and the amount will go to the owner [of the plane] from whom the PIA acquired it on lease,” spokesperson for Pakistan International Airlines (PIA) Abdullah H. Khan told Pakistan daily Dawn.
The aircraft was owned by the Celestial Aviation Trading 34 Limited, Ireland, which would get the insurance amount, not the PIA.The ‘hull insurance’ provides coverage for the physical damage of an airplane, whether the damage occurs on the ground or during flying.
Ninety-seven passengers and crewmembers of flight PK-8303 from Lahore to Karachi died in the plane crash. Only two passengers miraculously survived.
Quoting a PIA spokesperson, the Dawn's report says all the passengers of the ill-fated plane were also insured by NICL for Rs5m each
The family of each victim is being provided Rs1m for making arrangements for burial. In addition, the legal heirs of those who died in the crash would get Rs5m each.
PIA spokesperson said the airlinewould process and submit the claims on behalf of every affected family after completing the required legal formalities.
“Last time, it took five-six months [to get insurance amount],” he said referring to the 2016 ATR crash near Havelian in which all the 47 aboard died.
An 11-member team of experts belonging to Airbus arrived in Pakistan on May 26 to offer Pakistani investigators technical assistance in their ongoing probe. It will take to France the aircraft’s flight data recorder and cockpit voice recorder — the two components of the black box — to decode them.
Also on Friday, Sindh government’s spokesman and the chief minister’s law adviser Murtaza Wahab said in a tweet that four more bodies of the deceased passengers had been identified through DNA testing. He said the DNA matching process was going on at a Karachi University laboratory to identify the remaining bodies.