SUMMARY
The Business Standard article reports that following the Air India Flight AI-171 Boeing 787 Dreamliner crash in Ahmedabad on June 12, 2025, aviation insurance premiums for Indian carriers are expected to rise by 5-10% in FY27 due to increased reinsurance rates driven by global and domestic aviation losses.
Key points
- Claims Estimate: The crash is expected to result in claims of up to $150 million, with $80-100 million for aircraft damage and $50 million for liability (passenger, crew, and third-party claims).
- Reinsurance Impact: Aviation insurance is largely reinsurance-driven, with London-based firms setting prices based on global risks. The crash, combined with other incidents like a London High Court ruling ordering reinsurers to pay over $1 billion for aircraft stranded in Russia, is likely to harden reinsurance rates.
- IndiGo Renewal: IndiGo, with a fleet of 437 Airbus A320 jets, is negotiating insurance renewal for its $20 billion cover, with annual premiums of $15-17 million. The Air India crash may influence these talks, potentially increasing costs.
- Market Dynamics: The Indian aviation insurance market, valued at ₹900 crore annually, is expected to see tighter underwriting and higher premiums due to the cumulative effect of global incidents, including recent helicopter crashes and the Air India tragedy.
- The article highlights that while immediate premium hikes are unlikely, the next renewal cycle will reflect these heightened risks, impacting airlines’ operating costs.
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