Mumbai:
The recent ill-fated Air India(AI) Express plane,a narrow-body Boeing 737, crash at Kozhikode has cost global reinsurers and Indian insurers Rs 660 crore($89 mlns), the largest claim pay-out in the Indian aviation market.. .
On August 7, an Air India Express flight from Dubai to Kozhikode in Kerala suffered one of the worst aviation disasters in Indian history. The aircraft while landing in the night overshot the tabletop runway falling into a valley 35-feet below and broke into pieces,killing 21 people on board, including both the pilots and leaving many others severely injured.
Out of the re/insurers' total claim provision of $ 89 million, $51 million is for the Hull total loss and $ 38 mln for liability which may arise for passengers died or injured, TPL and baggage loss etc, said Atul Sahey, CMD, New India Assurance(NIA)..
State owned New India Assurance(NIA), which has led the AI insurance account as the lead primary insurer, has paid Rs 373.83 crs as a Hull claim to Air India, the highest ever pay-out in the Indian aviation insurance market in this segment,arising out of crash.
The majority of claims are funded by a few global reinsurers including GIC Re which has paid $ 7 million as its share of claim settlement.
Besides paying for the full settlement for the Hull claim, NIA, the largest general insurer in the country,has also paid Rs 3.50 crs for liability as immediate relief to passengers affected.
“We have paid $51 mlns equivalent to Rs 373.83 crs for Air India Hull claim arising out of crash landing at Kozhikode. Besides this, we have also paid Rs 3.50 crs for liability as immediate relief to passengers affected,’’confirmed Sahey..
All liability claims will be paid after completion of profiling of each and every passenger, documentation and assessment of all other liabilities which may arise in due course., said Sahay adding that ;iability claim payment may take few months to complete the documentation process at reinsurers end.
“The payment for aircraft Hull has been made within two working days after receiving necessary documents from reinsurers, setting high standards of service, reliability and always standing with our clients in the times of need and distress. It speaks volumes of our financial strength, cash liquidity and the trust bestowed on us by entire Indian air line industry as we are writing almost all commercial airlines in India,’’ said Sahay..
Air India had paid a higher premium of $30 million for a sum assured of $ 10 billion during 2020-21 renewal starting from Apr 1 . The total liability under the liability policy taken by AI is about $750 million.
The AI insurance account is majorly reinsured ,above 95 per cent, in London market with global re/insurers like AIG,AXA Allianz and GIC Re providing the reinsurance capacity.Leading speciality broker Global Insurance Brokers was the broker for the AI cover.
The AI Express will have to pay a compensation of around Rs 1.30 crore each to the next of kin of victims of the plane crash at Calicut International Airport as per the Montreal Convention treaty, which imposes penalties on air carriers for the death of passengers due to negligence.
As an interim compensation, families of all 190 people onboard have been paid by the airline’s insurance company, Air India CMD Rajiv Bansal had said
A consortium of four public sector insurers — New India Assurance, National Insurance Company, Oriental Insurance Company and United India Insurance Company — are the primary insurers of Air India.
The share of NIA in the premium and claims will be 40 per cent and the balance 60 per cent is shared equally by National Insurance, Oriental Insurance and United India.