A flurry of plane crashes across the world this year will find its echo in the domestic aviation insurance premium rates in the form of a 25-40 per cent hike.
The year 2009 will go down as a bad year for airlines with three major accidents .Air France, Yemenia and Caspian Airlines- killing around 550 persons. There were several other minor incidents too.
“The Air France and Yemeni a losses in June this year are likely to set the agenda for the airline insurance market for the rest of the year and potentially well into 2010.Estimates for Air France and Yemen Air loss have been put in the range of $700-800 million and $250-300 million, respectively.” Bhargav Dasgupta, managing director and CEO, ICICI Lombard General Insurance Company, said.
According to him, the losses incurred by the global aviation insurance market this year, excluding minor losses, are estimated at $1.32 billion till June 2009, as against a premium income if $416 million.”Nearly half of the airline placements so far globally have seen their hull and liability premium costs rise by more than 25 per cent compared to the previous year. This pattern is likely to continue for the rest of the year.As airlines insurance in India follows global trends, we expect a price rise for Indian carriers as well,” he added.
The aviation premium rate is primarily driven by the global trends owing to the large values for the aircraft and liability covers for which international reinsurance capacity is required.
The aviation insurance segment in India is set to boom with around 450 aircraft valued around Rs 49,200 crore to be added to existing fleet over the next five years, he added.
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