London market sources said there can be a claim of Rs 700 crore( $81 million)for Hull Loss (Aircraft Damage) as the Boeing 787-8 aircraft has been declared a total loss. There will be a Passenger Liability claims of around Rs 320 crore as under the Montreal Convention, families of deceased passengers are entitled to Rs1.3 crore each
London/Mumbai: With 241 lives lost and the aircraft completely destroyed, the devastating crash of Air India’s London-bound Flight AI171 near Ahmedabad on Thursday (12 June 2025), involving a Boeing 787 Dreamliner, is likely to trigger around Rs1600 crore($186 million) of re/insurance claims, one of the largest-ever aviation insurance events in the world.
London insurance market said the total projected insurance payout combining hull and liability exposures may cross Rs 1,000–1,600 crore, depending on final settlements and legal claim.
This incident is likely to harden the global aviation insurance market, especially for wide-body aircraft operators in Asia, said sources.
Air India had renewed its mega $20 billion insurance policy with multinational AIG as the lead reinsurer since Apr 1.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.
London market sources further said there can be a claim of Rs 700 crore($81 million) for Hull Loss (Aircraft Damage) as the Boeing 787-8 aircraft has been declared a total loss.,
The claims is estimated on the basis of age-adjusted insured value.
Further, there will be a Passenger Liability claims of over Rs 320 crore as under the Montreal Convention, families of deceased passengers are entitled to Rs1.3 crore each.
With 240+ fatalities, this could result in payouts exceeding Rs 320 crore.
The re/insurers, which have provided the cover to Air India, have already swung into action to assess the loss situation and amount of claims that need to be paid.
The primary insurers for the Air India 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.
The airline had paid a premium of $30 million, same as last year, for insuring over 300 aircraft.
At least 265 people were killed on Thursday when a London-bound Air India plane carrying 242 passengers and crew crashed into a medical college complex here and burst into a ball of fire less than a minute after takeoff, an official said.
The dead in the country’s worst air disaster in recent times included several people on the ground.
The reasons of the crash are not known yet.
Air India has confirmed that 241 people on board its London-bound flight were killed when the aircraft crashed shortly after takeoff from the Ahmedabad airport on Thursday.
The plane crashed on top of the dining area of state-run B.J. Medical College hostel, killing many medical students as well.
Four MBBS students and a doctor’s wife were among those killed, a senior official said. Several students were impacted after parts of the plane smashed into a dining hall at lunch time in the multi-storey hostel building.
According to Air India, of the 230 passengers, 169 were Indians, 53 British, seven Portuguese and one Canadian. The other 12 people on board were two pilots and 10 crew members.
The government on Thursday night announced that a probe by the Aircraft Accident Investigation Bureau (AAIB) into the Air India plane crash at the Ahmedabad airport as well as setting up a high-level committee on strengthening aviation safety and preventing such accidents in future.
This was announced by Civil Aviation Minister Ram Mohan Naidu. He said a formal investigation has been initiated by the Aircraft Accident Investigation Bureau (AAIB), in line with international protocols set by the International Civil Aviation Organisation(ICAO).
“Additionally, the Government is constituting a high-level committee comprising experts from multiple disciplines to examine the matter in detail. The committee will work to strengthen aviation safety and prevent such incidents in future,” he posted
Aviation experts said that going by the available visuals lack of thrust in both engines and a bird hit could be among the probable causes. TV footage showed the aircraft making a slow descent shortly after taking off, with its landing gear still extended.
Eyewitnesses in Ahmedabad said the blaze was so intense that it led to several multi-storey buildings being burnt, trees singed and cars damaged. One image showed the snout of the plane crashing through the top floor of a building that appeared to be a dining area of the hostel of nurses and doctors.
Elsewhere too, there were scenes of complete devastation with mangled metal of the wreckage, snarls of tangled wire and smoke rising from burning embers.