Ahmedabad Plane Crash: Boeing accident increases insurance companies’ tension, what major challenge lies ahead?

News has come from experts related to insurance and financial sector. Due to which these companies can get a big shock. Read more on Dynamite News

New Delhi: There was a stir in Ahmedabad, Gujarat, on Thursday afternoon when an Air India flight crashed as soon as it took off. This Air India flight was a Boeing 787 Dreamliner, which had a total of 242 passengers on board. This plane fell in a residential area, due to which there is a possibility of huge loss of life and property.

After this tragic incident, a wave of mourning has spread in the aviation world.

Affected Company

According to the Dynamite News correspondent, news has come from experts related to the insurance and financial sector that the impact of this accident will not be limited only to the passengers and their families, but there is going to be a huge financial pressure on the insurance companies as well.

According to Sourav Biswas, head of aviation insurance at Alliance Insurance Brokers, the insurance value of this plane was between 75 and 85 million dollars. If it is considered a total loss, then the insurers will have to pay the entire amount.

Foreign companies will pay

According to Biswas, Indian insurance companies do not bear the entire risk of such expensive planes themselves. That is why most of the insurance risks are shared through foreign reinsurance companies. In such a situation, the loss of Indian companies can be limited to a maximum of 10%, while the rest will be paid by foreign companies.

It is being told that this aviation insurance was led by Tata AIG General Insurance. Apart from this, government insurance companies like New India Assurance, United India Insurance, and Oriental Insurance were also co-insurers in this policy.

The compensation process starts

The process of compensation for passengers will be done under the Montreal Convention 1999, which will be calculated on the basis of SDR (Special Drawing Rights). If an average compensation of Rs 1 crore is considered for each dead passenger, then only this item can put a burden of Rs 240 crore on the insurance companies.

Including the hull and other liabilities, this loss can reach Rs 1000 to 1200 crore. This accident is once again raising many questions about the safety of the aviation sector and the strength of the insurance system.