Germany's Allianz has estimated insurers will pay $300 million in claims and costs stemming from the crash of a Germanwings plane...
Germany’s Allianz has estimated insurers will pay $300 million in claims and costs stemming from the crash of a Germanwings plane in the French Alps last week, insurance industry sources said on Monday.
The figure gives a preliminary orientation to a group of more than 30 insurers who will share the financial burden of the crash, which was believed to have been deliberately caused by the plane’s co-pilot.
The initial estimate represents about 20 percent of the $1.5 billion in premiums in the global market for airline insurance. The estimate includes the loss of the aircraft, which is seen at about $6.5 million, the recovery efforts, legal fees and indemnification of the passengers’ families.
Insurers traditionally estimate losses conservatively, taking as many costs as possible into account based on available information and past experience.
“It’s still very early so the figure could go higher, or lower,” said one insurance official familiar with the situation, saying insurers were legally obliged to set out estimates.
“It’s Allianz’s decision as they are the lead insurer,” the person said of the $300 million figure, which was also reported by industry paper The Insurance Insider.
Liability claims from the families of the 144 passengers are expected to account for the lion’s share of the costs. Insurers typically try to settle claims without going to court, though the process can take months.
Lufthansa said on Friday it was offering to pay up to 50,000 euros ($54,115) in immediate financial assistance per passenger.
Underwriting data on co-insurers’ shares of eventual losses, supplied by an insurance industry source, showed Allianz with a 10 percent share, American International Group with 11 percent and Swiss Re with 7 percent.
Allianz, which has said it is the lead insurer, declined to comment, as did AIG. Swiss Re declined to comment on the case but said both Germanwings and its parent Lufthansa were among its clients.
Insurers usually arrange to receive financial backing from reinsurance companies in the event of big losses. Insurance rating agency A.M. Best has said the Germanwings losses would also be absorbed by the Lloyd’s market.