Air India Express crash cost insurers highest-ever Rs 660 crore

The Air India Express plane crash, which happened this year in August, has cost Indian insurers and global reinsurers Rs 660 crore. Of the total Rs 660 crore, $51 million (Rs 379.12 crore) is the hull claim and $38 million (Rs 282.49 crore) is for liability that may arise for passengers who died, injured, etc in the crash.

New India Assurance (NIA), which is one of the primary insurers of Air India, has paid Rs 378.83 crore as a hull claim to the airline, the company CMD, Atul Sahai told The Indian Express. It was the highest ever pay-out in the Indian aviation insurance market arising out of the crash, Sahai added. The hull claim was made within two working days after receiving the necessary documents from reinsurers, he said.

Apart from paying for the full settlement for the hull claim, the NIA also paid Rs 3.50 crore for liability to passengers affected. He said that all liability claims will be paid after completion of the profiling of each and every passenger. The country's largest general insurers added that it will assess other liabilities which may arise in the due course. Sahai said that the payment may take some time due to documentation process at the reinsurers' end.

As an interim compensation, Air India said that families of all 190 people onboard have been paid by its insurance company. There are four primary insurers of Air India-- New India Assurance, National Insurance Company, Oriental Insurance Company and United India Insurance Company.

Air India had paid a premium of $30 million (Rs 223.02 crore) for a sum assured of $10 billion (Rs 74,340 crore) during 2020-21, renewal starting from April 1. The total liability under the policy taken by Air India is about $750 million (Rs 5,575 crore).

The AI insurance account is majorly reinsured in the London market with global re-insurers like AIG, AXA Allianz and GIC Re. As per the Montreal Convention treaty, the AI Express will have to pay a compensation of around Rs 1.30 crore each to the kin of victims of the plane crash. The treaty imposes penalties on the airlines for the death of passengers due to negligence.

In August this year, an Air India Express flight overshot the runway and broke into pieces at the Kozhikode (Calicut) airport in Kerala.  Flight number IX-1344 on its way from Dubai to Kozhikode with 190 passengers and crew on board went down 35 feet into a slope before breaking up into two pieces, killing 21 people on board, including both the pilots.

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