AI crash may push premiums of aviation insurance by up to 15%

AVIATION INSURANCE EXPLAINED An airline cannot operate—or even park—an aircraft without a valid insurance. So, how does aviation insurance work for airlines? According to industry experts, it is divided into three parts: hull insurance, war risk cover, and liability insurance

- NARAYANAN V

THE AIR INDIA AI-171 Boeing 787 Dreamliner crash in Ahmedabad on Thursday, combined with a series of global aviation losses, is expected to harden the general aviation insurance market. Industry experts say this could lead to a 10-15% hike in premiums next year as global reinsurers reprice risks.

Sourav Biswas, business head—aviation insurance at Alliance Insurance Brokers, said the two big carriers—IndiGo and Air India—will not see any impact this year, as they have already renewed their premiums. "But next year, I definitely see an upside in insurance costs for Indian operators."

The aviation insurance is largely driven by reinsurance, with global reinsurers, primarily based in London, pricing risk from a global portfolio perspective. According to Biswas, recent events like a UK court ruling could significantly impact reinsurer payouts.