Re-insurers to bear brunt of AI Mangalore crash
The Air India Flight from Dubai to Mangalore that crashed on Saturday killing almost everyone on board, has resulted in a total liability of about Rs 400 crore.business Updated: May 26, 2010 21:04 IST
The Air India Flight from Dubai to Mangalore that crashed on Saturday killing almost everyone on board, has resulted in a total liability of about Rs 400 crore.
The accident is likely to hit the re-insurers, as a majority of the liability has been reinsured.
“A majority of the liability is reinsured and thus will shift on the re-insurers with minimal impact on the four primary
insurers,” an official said on the condition of anonymity. “The process of establishing the liability is on the fast track,” he said.
Mitsui Sumitomo is the lead re-insurer, and GIC and ICICI Lombard are part of the consortium of reinsurers.
Re-insurance is the process used by insurance companies to share the risk factor. A part or all of the insurer’s risk is assumed by other companies in return for part of the premium paid by the insured.
“We have a very nominal involvement as reinsurers and are adequately covered,” the spokesperson of ICICI Lombard said.
While the survey for purposes of insurance is currently on and the announcement on the first tranche of payment is expected soon, insurers involved feel that the majority of the liability will go to Mitsui Sumitomo.
While Reliance General is the lead insurer with 48 per cent share, HDFC Ergo and IFFCO Tokyo have 25 per cent each followed by a 2 per cent share by Bajaj Allianz.
When contacted, the Reliance General spokesperson said: “We do not comment on individual policies.”