GIC may hike aviation reinsurance rates by 15%

Kolkata: The General Insurance Corporation of India (GIC) may hike reinsurance premiums on aviation risk covers by 10 to 15 per cent in April, according to sources in GIC.
The proposed hike in aviation insurance premium will add to the burden of the global aviation sector already hit hard by economic slowdown.
A number of aviation accidents worldwide in 2009 is believed to have prompted reinsurers across the world to rework the rates.
These included the Air France flight 447 crash, the Caspian Airlines flight 7908 (Iran) accident, and Colgan Air, Turkish Airlines and Yemenia Airways' plane crashes.
GIC, which extends 90 per cent of its total aviation reinsurance contracts to foreign airlines, also burnt its fingers in some of these. In the Air France accident, for example, it had claim exposure of $5 million, a considerable chunk of which has already been paid, a senior GIC officer told Business Line.
Out of the total reinsurance premium of Rs 8,000 crore lying with GIC this year, nearly Rs 500 crore came from the aviation sector.
Even the domestic airlines were not free from accidents this year. In two such incidents, insurance claims had emerged from Air India and Kingfisher Airlines. The domestic airline companies too take a substantial portion of cover from foreign reinsurers.
07/12/09 Manish Basu/BusinessLine

To Read the News in full at Source, Click the Headline

Categories: Indian Aviation- In General Dec 2009