Air India Crash Triggers Up to 30% Global Surge in Airline Insurance Premiums
The aviation insurance market is bracing for a major shake-up in the aftermath of the catastrophic Air India crash in Ahmedabad, which claimed 241 lives. Industry insiders say the tragedy is expected to send airline insurance premiums soaring worldwide, with Indian carriers facing hikes of up to 30 percent in the upcoming renewal cycle.
This unprecedented surge comes as insurers assess the scale of the financial fallout. Initial estimates put the insurance claims around $475 million, including aircraft hull, engine damage, and third-party liabilities for loss of life and property. The magnitude of the loss has jolted both local and global underwriters.
“There is a possibility of a huge increase in insurance covering the hull, war-risk and liability cover. Such accidents become a big risk for insurance companies, the effect of which will be clearly visible on the next insurance,” said Chowdary, director at Policybazaar for Business.
Air India’s fleet, reportedly insured for about $20 billion with an annual premium of around $30 million, will likely see adjustments that could ripple across all major airlines. Experts warn that these hikes won’t be limited to India, as reinsurance costs are poised to climb globally in response to what’s being termed one of the worst aviation disasters in over a decade.
According to Allianz SE, crashes formed the bulk of the $15 billion in global aviation claims from 2019 to 2024. With the Asia-Pacific region driving rapid expansion in air travel, insurers had projected a growth in global aviation premiums to surpass $8 billion. The Ahmedabad crash, however, may reset those expectations.
While Air India and its insurers are still processing the full extent of liabilities, the incident is already influencing risk models and pricing strategies worldwide. Insurers are revisiting risk thresholds, particularly in high-traffic regions like South Asia.
As the sector prepares for its next round of renewals, airlines may need to reassess their budgets, possibly passing on part of the added cost to passengers. Meanwhile, analysts caution that further accidents of this magnitude could push aviation insurance premiums to historic highs. – News Agency