The crash of Air India flight AI171 on June 12, which killed all 241 passengers and crew, marks the first fuselage failure of a Boeing 787-8 Dreamliner. The disaster is set to intensify pressure on aviation insurers and reinsurers worldwide. GlobalData warns that claims from this incident could exceed India’s entire 2023 aviation insurance premiums.
India’s Aviation Insurance Landscape
In 2023, Indian insurers wrote $127.8 million in domestic aviation premiums. Major players include New India Assurance and Tata AIG, yet aviation risks account for just 1.1% and 1.0% of their total premiums, respectively. Both companies transfer over 95% of their aviation risk to global reinsurers, shifting most of the financial burden offshore. State-owned GIC Re also retains about 5% of exposure due to mandatory assignment rules.
Historic Red Ink and Rising Claims
The Indian aviation sector has already faced heavy losses from multiple Jet Airways and SpiceJet incidents and the crash of a Su-30 fighter jet. GlobalData anticipates the AI171 claim may top $200 million. This figure covers the aircraft’s estimated value of $75–80 million and passenger liabilities under the Montreal Convention and domestic law.
Reinsurance Market Under Review
GlobalData predicts that reinsurers will reassess existing treaties and push for higher rates in the 2026 renewal cycle. Anticipated industry reactions include:
Tightened underwriting terms: Stricter risk assessments for wide-body aircraft
Premium increases: Higher rates to offset potential large claims
Exposure reviews: Rebalancing portfolios to limit Dreamliner risk
Potential Business Interruption Claims
The Indian government is reportedly considering grounding all Boeing 787-8s pending safety checks. Such a move could trigger business interruption claims and further erode insurer profitability.
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