The devastating crash of Air India’s London-bound Flight AI171 near Ahmedabad on 12 June 2025, involving a Boeing 787 Dreamliner, has led to one of the largest-ever aviation insurance events in India. With over 240 lives lost and the aircraft completely destroyed, the insurance response spans both domestic and international markets.
🔍 Insurance Highlights:
🔸 Lead Insurer: The aviation policy is led by Tata AIG General Insurance, backed by Indian co-insurers like GIC Re, United India, Oriental Insurance, and ICICI Lombard.
🔸 Global Reinsurance Support: Around 95% of the risk is reinsured with major global players including AIG, AXA XL, and other reinsurers in the London and Bermuda markets.
🔸 Hull Loss (Aircraft Damage): The Boeing 787-8 aircraft, declared a total loss, is estimated to be insured for ₹650–700 crore, based on age-adjusted insured value.
🔸 Passenger Liability: Under the Montreal Convention, families of deceased passengers are entitled to ~₹1 crore each. With 240+ fatalities, this could result in payouts exceeding ₹240 crore.
🔸 Total Projected Insurance Payout: Combined hull and liability exposures may cross ₹1,000–1,500 crore, depending on final settlements and legal claims.
🔸 Risk Distribution: Indian insurers retain only around 5% of the exposure, amounting to ₹50–75 crore, while the bulk will be absorbed by foreign reinsurers.
🔸 Policy Scale: Air India’s fleet-wide aviation cover reportedly runs into ₹8,000–10,000 crore, with an annual premium estimated at around ₹250 crore.
📌 Market Impact: This incident is likely to harden the global aviation insurance market, especially for wide-body aircraft operators in Asia.
