‘Air India plane crash likely to lead to hardening of aviation insurance market’

Air India Dreamliner crash in Ahmedabad to impact aviation insurance rates, with liability coverage exceeding $500 million.

The Air India A1-171 Boring 787 Dreamliner crash at Ahmedabad on Thursday, which has been termed as ‘significant incident’ in the insurance industry is expected to influence aviation insurance rates going forward, said insurance industry officials

“The general aviation insurance premium market in India is estimated at around ₹900 crore. While most large losses are reinsured, this event is expected to influence aviation insurance rates going forward,” said Amit Agarwal, CEO & MD Howden, India.

Narendra Bharindwal, President, Insurance Brokers Association of India (IBAI) said the liability coverage, especially for flights operating in or to regions like Europe—typically exceeds $500 million.

“This incident, along with others in recent months, will likely result in a hardening of the aviation insurance market, not just for the airline involved, but across the entire aviation sector,” he added.

Stating that aviation insurance programmes for major airlines such as Air India are arranged on a fleet basis and reinsured across international markets like London and New York, he said no single insurer bears the entire risk.

“Coverage is widely distributed among global reinsurers, with shares as small as 1.5% to 2% and a lead reinsurer typically taking 10-15%,” he said.

“The financial impact of such incidents is shared globally across this network. While immediate premium adjustments are unlikely, the cumulative effect of multiple aviation incidents worldwide—including this one—will influence renewal terms and premiums for the sector in the next underwriting cycle,” he emphasized