News | Air India Crash May Lead to Record ₹1,500 Crore Insurance Payouts

Air India Crash May Lead to Record ₹1,500 Crore Insurance Payouts

News

18 June 2025

1 min read

UBS Forums

316

The catastrophic crash of Air India Flight AI‑171, a Boeing 787‑8 Dreamliner near Ahmedabad on June 12, may trigger one of India’s largest aviation insurance claims—estimated at around $475 million (approximately ₹1,500 crore), according to officials familiar with the matter

The insurer’s payout includes roughly $125 million for hull and engine loss—reflecting the recent ₹100 crore increase in insured value following an engine replacement in April—and an additional $350 million largely allocated for liability claims under international conventions

Global reinsurers, covering more than 90% of the policy, will shoulder the bulk of the liability, protecting Indian insurers from total exposure. The Insurance Regulatory and Development Authority of India (IRDAI) has swiftly instructed carriers involved to fast-track claims, appoint nodal officers, and waive formal documentation to support affected families

While domestic insurers brace for a financial hit, analysts predict the aviation sector could face rising insurance premiums in the next renewal cycle. Despite the severity of this event, experts believe it’s unlikely to derail long-term growth plans, although increased cost of coverage may influence fleet acquisition and risk strategies

Reference: IndiaTimes