India’s most devastating plane crash in over a decade has sent ripples through the global aviation insurance industry. The crash, which occurred in Ahmedabad and claimed 241 lives, is now linked to a massive insurance payout estimated at Rs 39.4 billion or approximately 475 million dollars. This makes it one of the largest aviation insurance claims in Indian history.
Breakdown of the Insurance Claim
According to Ramaswamy Narayanan, Chairman and MD of General Insurance Corporation of India, the hull and engine claim alone is pegged at Rs 10.44 billion. An additional Rs 29.23 billion is expected in liability claims for loss of life. The total payout is more than three times the entire annual aviation insurance premium collected in India in 2023.
Impact on Aviation Insurance and Reinsurance
This unprecedented payout is expected to have a cascading effect on the aviation insurance market. Since Indian insurers have ceded over 95 percent of their aviation premium to international reinsurers, the financial burden will primarily fall on global players. This will likely lead to higher reinsurance costs and tougher market conditions, commonly referred to as a hardening of the insurance market.
Airlines May Face Costlier Premiums
Industry experts suggest that this tragedy will make aviation insurance premiums more expensive for Indian carriers, either immediately or during the next policy renewal cycles. Claims involving foreign nationals will be settled as per the legal frameworks in their respective countries, which could further inflate the total claim amount.
Settlement Timeline and Future Outlook
As per current procedures, the hull claim will be processed first, followed by liability settlements—a process that may take several months. Despite the domestic insurers’ limited exposure to the loss, this crash is expected to have long-term implications on how aviation risks are evaluated and priced in India.
