India’s deadliest plane crash in more than decade is set to send shock waves through the aviation insurance industry
and trigger one of the country’s costliest claims, estimated at around $475 million.
“This aviation insurance claim could be one of the biggest in India’s history,” said Ramaswamy Narayanan, chairman
and managing director at General Insurance Corporation of India, one of the firms that has provided coverage for Air India.
The claim for the aircraft hull and engine is estimated at arou
nd $125 million, according to Narayanan. He estimates additional liability claims for loss of life for passengers and ot
hers will be around $
350 million. The sum is more than triple the annual premium for the aviation industry in India in 2023, according to GlobalData.
Deadly Air India Crash Will Harden Aviation Reinsurance Market: GlobalData
The financial repercussions of the crash that killed 241 people on board and others as it fell in a densely pop
ulated part of Ahmed
on insurance and reinsurance market. It’s also likely to make insurance costlier for airlines in India.
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An aircraft tire amongst the debris at the crash site of Air India f
light AI171 in Ahmedabad on June 12, 2025. Photo credit: Siddharaj Solanki/Bloomberg
Insura
nce premiums across the aviation industry are expected to rise in Indi
a, either now or at the time of policy renewals, according to people familiar with the matter.
On the Air India insurance payout, totals could climb, since there
were foreign nationals killed in the accident, and those claims will be ca
lculated according to the rules in their respective jurisdictions, the people said, who asked not to be identified discussing private matters.
A spokesperson for Air India did not immediately reply to request for comment.
Insurers will first settle the hull claim followed by liability claims, a
ccording to Narayanan. “It will take some time for liability claims to be settled,” he said.
The impact on the domestic market will be partly mitigated by the fact that both companies only generated about 1%
of their total insurance premium from aviation, and ceded most of
it to global reinsurers, according to GlobalData’s insurance data.
Broadly, domestic insurers have offloaded more than 95% of their aviation insurance direct written premium, or DWP, to global reinsurers.