Insurers fight again for Air India contract

Mumbai: Air India’s mega insurance cover of $9.1 billion (Rs 41,800 crore) has kicked off a spat between insurance companies once again. This time it is between ICICI Lombard and a consortium led by Iffco Tokio, with the latter complaining to AI that there was a huge gap between the price quoted by the insurer and the reinsurer.
In a communication to the chief vigilance officer of National Aviation Company India Ltd (Nacil), and its executive director, finance, Iffco Tokio has formally alleged collusion in bidding and that the reinsurer did not fulfil all tender requirements.
Last year, a public sector consortium led by The New India Assurance Company Ltd, had written to the CVO of AI that the Reliance General-led consortium which won the contract had not adhered to the contract norms. The airline had paid $24.3 million to Reliance General Insurance for a total sum assured of $8.59 billion.
AI had called ICICI Lombard, Iffco Tokio and New India, the technically qualified bidders, on September 16 to open the bid documents. “Both ICICI Lombard and the New India-led consortium had quotes from the same reinsurer, Chartis UK, for two lines of business. But while ICICI Lombard placed hull and war risk with them, New India failed to do that,” said an insurance company executive privy to the development.
Both ICICI Lombard and the New India consortium had a reinsurance quote from the same reinsurer, Chartis Insurance, but had different bids. Also, Chartis, the reinsurer, did not meet the tender qualification for hull and war risk.
20/09/10 Shipy Sinha/Business Standard

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Categories: NACIL Sep 2010