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Airlines could see a 10% to 15% increase in premiums following the March 10 Ethiopian Airlines crash that led to 157 deaths.
Several major air accidents in recent years have led to a hardening of global aviation insurance rates. In regions where the crashes occurred, premiums have gone up by 20% to 30%.
In the past five years, there have been several major aviation accidents that have caused over 100 fatalities each. These include Malaysian Airlines Flight 370 (227 deaths), Cubana de Aviación Flight 972 crash (112 deaths), Malaysian Airlines Flight 17 crash (298 deaths), and the Lion Air crash (189 deaths).
“There was the Lion Air crash and now the Ethiopian Airlines crash. This is a worrying trend since these are new aircraft and this will impact premiums for airlines this year,” a senior official at a major insurance brokerage told Indian financial portal Moneycontrol.
While many Indian insurance companies have “minimal exposure” to the crashes, the global nature of these incidents will affect even Indian insurers and airlines.
Over 100 countries, including Inda, are signatories to the Montreal Convention of 1999, which governs standards pertaining to air travel. Article 50 of the convention says states must see to it that their airlines have adequate insurance covering their liabilities.
