‘GIC Re will keep a provision of nearly 200 cr for A-I tragedy'

Following the devastating Air India crash that claimed over 270 lives, Ramaswamy Narayanan, chairman and managing director (CMD) of state-owned reinsurer General Insurance Corporation of India (GIC Re), spoke to Aathira Varier and Subrata Panda in Mumbai about claims the insurance industry is expected to see as a result of the tragedy. Edited excerpts:

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What would be the claims outgo for the Air India crash?

Overall, I would expect a loss of about $475 million—$125 million for the hull and the remaining of over $350 million for liability. This is what we will be providing for, regardless of market perception. Our share is about 5.15 per cent of the $475 million—4 per cent from obligatory cession and 1.15 per cent written through our London branch. We will be making the provision in Q1. It will be less than ₹200 crore, so it will not have any impact on our profitability or solvency. Overall, our aviation segment is small, accounting for nearly 2–3 per cent.

How will aviation insurance rates get impacted because of the crash?