The Air India AI-171 Boeing 787 Dreamliner crash in Ahmedabad on Thursday, combined with a series of global aviation losses, is expected to harden the general aviation insurance market. Industry experts say this could lead to a 10–15% hike in premiums next year as global reinsurers reprice risks.
Sourav Biswas, business head – aviation insurance at Alliance Insurance Brokers, said the two big carriers — IndiGo and Air India — will not see any impact this year, as they have already renewed their premiums. “But next year, I definitely see an upside in insurance costs for Indian operators.”
The aviation insurance is largely driven by reinsurance, with global reinsurers, primarily based in London, pricing risk from a global portfolio perspective. According to Bisawas, recent events like a UK court ruling could significantly impact reinsurer payouts.
On Wednesday, the London High Court ruled in favour of six leasing companies, including Ireland’s AerCap and Dubai Aerospace Enterprise (DAE), in a $4.7-billion lawsuit against insurers over aircraft stranded in Russia following the 2022 invasion of Ukraine. The ruling, one of the biggest insurance disputes in the UK history, is expected to trigger multibillion-dollar reimbursements from reinsurers.
“Combining this huge loss with the Air India accident, reinsurers are definitely going to have a bad day,” Biswas said, estimating premiums could rise by roughly 5–10% next year.
The Air India crash is already expected to become one of India’s most expensive aviation claims, with experts pegging losses at $120–150 million (around ₹1,000–1,200 crore) for Indian insurers and global reinsurers. Since the aircraft crashed in a civilian area, total claims could even exceed ₹2,000 crore after a full assessment of third-party losses, including loss of lives and properties, experts said.
The country’s largest airliner, IndiGo, paid ₹114 crore in aircraft insurance premiums in FY24 while Air India paid ₹233 crore. Airline-specific premium data for FY25 are yet to be published.
“This premium outgo could see another 10–15% increase at best,” a senior executive at a private general insurer said. The executive noted that coverage is widely distributed among global reinsurers, with shares as small as 1.5–2%, while a lead reinsurer typically holds 10–15%. “So, there is no scope to increase the premium substantially.”
Hari Radhakrishnan, an expert from the Insurance Brokers Association of India (Ibai), said since Air India did not face a major incident after the 2010 Mangalore crash involving hull loss, it managed to favourably negotiate premium terms.
However, a spate of recent global losses — including the American Airlines crash earlier this year and the Jeju Air disaster, which killed 175 passengers and four of six crew in the deadliest air crash on South Korean soil — is likely to influence underwriters.
“The aviation market is likely to harden the next year. So, Air India may face a bigger premium bill for renewal of its fleet next year,” Radhakrishnan said.
Hitesh Girotra, vice president – aviation & specialty lines at Prudent Insurance Brokers, said global underwriters typically look at a five-to-10-year track record of an operator while pricing premiums. “If there is a history for an operator having frequent losses, you will definitely see an increment in the premium,” Girotra said.
Reinsurers can absorb one-off loss as they already have premium reserves built up over the years, he added.