Air India had increased the insurance cover for the Boeing 787-8 Dreamliner that crashed in Ahmedabad. The amount was raised from Rs 750 crore to Rs 850 crore during the policy renewal in April 2025, after the plane’s engine was replaced, a Times of India report said citing sources.
The total insurance claims from the crash are expected to reach around Rs 1,500 crore. Indian insurance companies, led by Tata AIG, will likely pay only Rs 100–150 crore of that amount, the report said. Most of the financial risk had been passed on to international reinsurers.
The Air India flight was headed to London’s Gatwick airport when it crashed last week, killing around 270 people, including 241 passengers and crew.
Passenger and aircraft compensation
The insurance claims, however, are likely to be around Rs 1500 crore. Insures from India led by TATA AIG will be bearing a part of the same, estimated between Rs 100 and 150 crore, while the global insurers will take on the majority of the burden. For the passengers who lost their lives, Tata announced a Rs 1 crore compensation shortly after the incident.
Additionally, this incident compensation falls under the Montreal Convention. It only means that the compensation amount will reach Rs 1.8 crore for families of the deceased. This takes the total liability to more than Rs 400 crores. The Boeing Dreamliner was a part of a fleet-wide cover of Rs 8000-10,000 crore. Air India paid an annual premium of Rs 250 crore to the insurer for their fleet.
Who are the insurers?
The aviation policy is led by TATA AIG General Insurance. GIC Re, United India, Oriental Insurance, National Insurance and ICICI Lombard are other Indian co-insurers. Despite of having multiple insurers, the 90% of the risk is insured by global plays AIG, AXA XL and others in London and Bermuda markets.
Indian insurers are bearing only about 7.5–10% of the total insurance exposure, amounting to approximately Rs 100–150 crore. The bulk of the payout responsibility lies with foreign reinsurers. The aircraft’s hull loss alone—based on its age-adjusted insured value—is estimated at ₹850 crore, as the Dreamliner has been deemed a total loss.
Impact of AI171 crash globally
Experts believe this incident will likely tighten the global aviation insurance market, particularly for wide-body aircraft operators in Asia, given it marks the region’s first major crash involving such an aircraft.
Meanwhile, the Insurance Regulatory and Development Authority (IRDA) has directed all involved insurers to provide weekly claim settlement updates starting June 16. In a circular dated June 14, the regulator also urged insurers to fast-track payouts under life and personal accident policies, and to waive documentation like FIRs and postmortem reports. Nodal officers have been mandated for handling these claims.