Aviation cover rates may increase

Mumbai / New Delhi: Aviation insurance rates are likely to increase after an Air India (AI) Express flight crashed while landing at the Mangalore airport on Saturday, killing 158 people in the worst airline accident in India in a decade, according to insurance company executives.
The claims stemming from the Mangalore crash will have a “big impact” on insurance rates, said T.A. Ramalingam, head of underwriting at Bajaj Allianz General Insurance Co. Ltd, who also cited an increase in the number of smaller aviation-related claims in the past two years.
Insurance rates are going to “harden” when aviation insurance policies come up for renewal, said Ramalingam.
Another executive with an insurance firm who asked not to be identified as he is not authorized to speak with the media said insurance premiums for India’s airlines may rise by around 5% depending on the safety record of the carrier.
The premium local insurers charge an airline is based on international benchmarks such as reinsurance backup, which is calculated for a country based on the last 10 years’ record of the airlines and the premiums absorbed. “When a crash happens, this premium is raised so we can’t give discounts to the airlines to the extent we would have otherwise,” the executive said.
24/05/10 P.R. Sanjai and Tarun Shukla/Live Mint

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Categories: Air India Budget May 2010, Airports May 2010, Indian Aviation- In General May 2010, NACIL May 2010, Safety May 2010