Indian aviation & insurance

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: fly-ing into and over European Union air-space. GIC Re has also significant ca-pacities for Hull War Cover (excluded from the Hull All Risk Cover) going right up to USD 40 Mln for Indian and SAARC aviation accounts.

Following the WTC loss and result-ant re-assessment of threat percep-tion, the premium rates in the aviation class saw a gigantic increase. This also created a period of very good prof-itability for the aviation class which had till then seen the down-cycle and booked losses during the previous half decade. This unprecedented harden-ing of the aviation insurance market also attracted significant capacities. This was alongside improvement in safety record witnessed by the Aviation sector which was unprecedented. This culminated in correction of hard mar-ket post-WTC with 2006 witnessing airline claims perilously close to pre-mium figures. The rates have now re-turned to pre-WTC loss levels and air-line insurance market is now incurring losses. The downtrend is continuing but there are unmistakable signs of capacity withdrawal owing to uneco-nomic rates at which business is now written.

Owing to expansion of capacities for general aviation in the regional mar-ket, Indian domestic general aviation sector has also tnessed softening trends. In the recent past, there was creation of significant capacity by ICICI Lombard General Insurance Company. Alongside the general op-timism generated by the Indian econ-omy, everyone is gung ho about avia-tion sector resulting in efforts to build aviation portfolio at possibly quite un-economic rates. This is sometimes re-flected in aggressive rating, de-ductibles lower than standard market deductibles and dilution of pilot expe-rience warranties. Given the signifi-cant capacities with Indian players, any general aviation account can now