Ahmedabad Plane Crash: One of India’s Largest Insurance Payouts — The Estimated Amount Will Shock You
According to Ramaswamy Narayanan, Chairman and Managing Director of the General Insurance Corporation of India (GIC Re), the aviation claim could become the biggest ever in India's aviation history.
Ahmedabad, Gujarat: The recent Air India plane crash in Ahmedabad has not only marked the worst aviation disaster in India in a decade but also triggered one of the largest insurance payouts in the country’s history. The estimated insurance claim stands at a staggering $475 million, or ₹39.4 billion (₹4,000 crore), dealing a major blow to the global aviation insurance and reinsurance industry.
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Hull and Liability Claims Skyrocket
According to Ramaswamy Narayanan, Chairman and Managing Director of the General Insurance Corporation of India (GIC Re), the aviation claim could become the biggest ever in India’s aviation history.
The insurance breakdown is as follows:
- Hull and engine damage: Estimated at $125 million (₹10.44 billion)
- Passenger and third-party liability claims: Estimated at $350 million (₹29.23 billion)
“The hull claim is always addressed first, followed by other liabilities,” Narayanan stated, adding that settlement of claims will take time, given the scale and complexity of the incident.
Also Read: Air India’s Ahmedabad-London, Delhi-Paris Flights Cancelled Due To Technical Glitch
Insurance Payout Three Times More Than 2023 Premiums
According to Bloomberg, this claim far exceeds the aviation sector’s total insurance premium paid in India in 2023, making it more than three times the annual figure. The impact is expected to ripple across the entire global aviation reinsurance market, with India at the epicenter of this financial turbulence.
Aviation Insurance Costs Set to Rise
With the insurance sector absorbing such a massive blow, airlines in India could soon face higher premiums. Industry analysts warn that:
- Premium rates may spike immediately or during the next renewal cycle
- Smaller carriers might struggle with increased insurance costs
- Reinsurers worldwide may reconsider risk exposure to Indian carriers
The General Insurance Corporation of India, a key player in the aviation insurance sector, is one of the main insurers of Air India, further intensifying the domestic financial impact.
A Wake-Up Call for Indian Aviation Sector
This incident has put a spotlight on the vulnerability of the aviation sector to catastrophic losses, and the urgent need for better risk management and safety measures. With dozens of fatalities and major aircraft damage, the crash has not only devastated lives but also disrupted the equilibrium of aviation insurance markets worldwide.
