Air India Crash caused a $475 million claim

India’s most deadly plane crash crash in over a decade has been set to send shockwaves through the aviation insurance industry, causing one of the nation’s most costly claims, estimated at around $475 million.

“This air insurance claim could be one of the biggest in India’s history,” said Ramaswaminarayanan, chairman and managing director of India’s General Insurance Corporation, one of the total insurers in India.

According to Narayanan, the aircraft’s hull and engine bill is estimated to be around $125 million. He estimates additional liability claims for the loss of passenger life and others will be around $350 million. According to GlobalData, this total is more than three times the annual premium for India’s aviation industry in 2023.

The financial impact of the crash, which killed 241 people on board when it fell into the densely populated portion of Ahmedabad in western India on Thursday, overcomes the global aviation and reinsurance market. It could also make insurance for Indian airlines more expensive.

According to those familiar with the issue, premiums across the aviation industry are expected to rise in India, either now or at the time of insurance renewal.

People said that in Air India Insurance payments, the total could rise as foreigners were killed in the accident, and those claims will be calculated according to the rules of their respective jurisdictions.

An Air India spokesman did not immediately reply to a request for comment.

According to Narayanan, the insurance company will first settle the liability claim following the hull claim. “It will take some time for the liability claim to be resolved,” he said.

According to GlobalData, the two companies generate only about 1% of their total premiums from airlines, partly mitigated by the fact that they only generate about 1% of their total premiums from airlines, and have given away most of them to global reinsurers.Insurance data.

Roughly, domestic insurers offloaded more than 95% of their aviation insurance directly in writing premiums, or DWPs, to global reinsurers.

For this reason, “the financial burden is primarily on international reinsurers, leading to aviation reinsurance and hardening of the insurance market,” Swarup Kumar Sahoor said in a release on Monday.

This story was originally introduced Fortune.com