Air India Crash in Ahmedabad Triggers India’s Largest Aviation Insurance Claim

Mumbai (ET) — The recent crash of an Air India Boeing 787 Dreamliner near Ahmedabad is expected to result in India’s largest aviation insurance payout in Indian history, with total claims projected to surpass $120 million. The tragic incident, which claimed more than 240 lives and caused extensive damage in the Meghani area near the airport, has set off a complex chain of insurance liabilities for both the airline and its underwriters.

The bulk of this payout stems from the total hull loss of the aircraft, estimated at around $80 million. Additionally, passenger liability is anticipated to range between $30 million and $100 million, depending on final compensation figures, as several high-net-worth individuals were reportedly onboard.

Tata AIG General Insurance is the lead insurer for the aircraft, while other insurers, including New India Assurance, ICICI Lombard, and Oriental Insurance, are minor stakeholders. However, the lion’s share of the risk is held by global reinsurers through a policy placed in the London reinsurance market.

Indian insurance companies are expected to bear less than 10% of the overall financial burden. The state-owned General Insurance Corporation of India (GIC Re) holds a 5% share in the reinsurance treaty, translating to a potential claim of approximately $4.1 million.

The aircraft, registered as VT-ABN and delivered in 2013, was reportedly insured for approximately $115 million as of 2021. Industry experts believe this will be the largest insurance claim involving an Indian carrier to date. For comparison, the Mangalore crash in 2010 and the Kozhikode crash in 2020 resulted in combined insurance payouts of roughly $60–70 million.

Air India, now part of the Tata Group, has a liability coverage limit of up to $1.5 billion. Compensation per passenger for bodily injury or death may go as high as $250,000, according to an industry source.