Mumbai: The shooting down of a Malaysia Airlines Boeing 777 in Ukraine might lead to an increase in insurance premium rates in war-risk category, according to experts. They say insurers are likely to insist on riders or ask for higher premium for war risk from airlines flying to and over troubled areas such as Ukraine.
The aircraft that crashed over eastern Ukraine, MH17, killing all 298 on board, is the second loss for the airline in four months. In March another Malaysia Airlines aircraft, MH370, had mysteriously disappeared in the Indian Ocean.
In the latest incident, Malaysia Airlines’ lead reinsurer is likely to pay the claim arising out of the crash. This would mean an increase in premium going forward, said experts. However, the risewould be marginal as there are several reinsurers who can offer cover at competitive prices. Besides, insurance companies will need to discuss the measures and such riders could be introduced only after a consensus.
19/07/14 M Saraswathy & Aneesh Phadnis/Business Standard
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The aircraft that crashed over eastern Ukraine, MH17, killing all 298 on board, is the second loss for the airline in four months. In March another Malaysia Airlines aircraft, MH370, had mysteriously disappeared in the Indian Ocean.
In the latest incident, Malaysia Airlines’ lead reinsurer is likely to pay the claim arising out of the crash. This would mean an increase in premium going forward, said experts. However, the risewould be marginal as there are several reinsurers who can offer cover at competitive prices. Besides, insurance companies will need to discuss the measures and such riders could be introduced only after a consensus.
19/07/14 M Saraswathy & Aneesh Phadnis/Business Standard
