Air India crash to be India’s costliest aviation insurance claim, Bloomberg reports

Liability settlements take time

The report notes that insurers typically process the hull claims first, with liability settlements taking longer. “It will take some time for liability claims to be settled,” Narayanan told Bloomberg, adding that foreign victims will trigger cross-border legal proceedings, as compensation will be subject to the laws in their respective countries.

While Indian insurers such as GIC Re are involved, the bulk of the financial impact is expected to be absorbed by international reinsurers. Bloomberg, citing GlobalData insights, reported that Indian insurance companies cede over 95% of their aviation insurance premiums to global reinsurers.

This heavy reliance on international partners means the domestic market may avoid major financial strain, even as global underwriters take the hit.

“The financial burden will predominantly fall on international reinsurers, leading to the hardening of the aviation reinsurance and insurance market,” said Swarup Kumar Sahoor, senior insurance analyst at GlobalData, in a statement quoted by Bloomberg.

As of now, Air India has not issued a public comment on the insurance claim, according to Bloomberg.

The Air India tragedy is expected to drive up aviation premiums in India, whether immediately or during annual renewals, the report concluded, particularly as global reinsurers adjust pricing models in the wake of the large-scale loss.

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