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Business Standard
2 days ago
- Business
- Business Standard
Air India plane crash may trigger up to $150 mn in global insurance claims
The crash of the Air India plane in Ahmedabad is expected to result in insurance claims of $130 million-150 million, according to industry insiders. The majority of these claims will likely be borne by global reinsurers because aviation policies are typically structured with primary insurers transferring a significant portion of the risk through reinsurance arrangements. About 10 per cent of the claims are likely to come on the books of Indian insurers and reinsurers, according to industry observers. The claims will include three kinds of liabilities: Damage to the aircraft; loss of lives who were aboard the aircraft; including the crew members; and third-party liability because of loss of lives where the aircraft crashed; and cargo liability. Industry insiders are estimating $80 million-100 million in claims for the aircraft damage following the crash, and over $50 million in claims for the deaths of the passengers and crew members, and the deaths of non-travellers owing to the crash -- part of third-party liabilities. Air India had insured its fleet for $20 billion with Indian insurers including TATA AIG General Insurance, ICICI Lombard General Insurance, New India Assurance, and the other state-owned general insurance companies. TATA AIG has provided coverage for 30-40 per cent of the risk and is the lead insurer among the primary insurers. These insurers, in turn, have reinsured most of the risk with reinsurers, including state-owned GIC Re, America-based AIG, and AXA XL. 'Airline fleet policies are reinsurance-driven. In the case of Air India a significant amount will be with the reinsurers. Aviation policies are agreed-value policies and the agreed value of the aircraft is $80 million. However, putting an estimate on liabilities is tough because the nationalities of the passengers play a vital role in understanding what kind of liability we are looking at. Also, there is some damage on the ground, so there will also be some third-party liability. In such an event, aviation reinsurers are usually quick to respond. Their appointed surveyors and solicitors will swing into action, approach the families of the deceased, and try to settle the claims as quickly as possible. But it is a long-drawn process. This event is likely to have an impact on aviation insurance rates,' said an insurance-industry insider. According to another senior insurance executive, aircraft are comprehensively insured, with the primary insurance subsequently reinsured by global firms. Insurance coverage generally includes damage to the aircraft, the deaths and injuries, as well as damage to cargo and personal belongings. 'In such cases (crashes), Indian insurance companies are usually not significantly burdened financially because most of the risk is transferred to reinsurers. Following an incident, reinsurers often take the lead in advising Indian insurers on the appropriate course of action. However, this incident is likely to affect aviation insurance premiums, with reinsurers potentially increasing rates based on their loss experience,' the person said. While there would not be much of an impact on the profit and loss accounts of Indian insurers, they will certainly take a hit on solvency, with TATA AIG taking the biggest hit since it was the lead primary insurer. 'The solvency of insurers will be affected with a major impact on the lead insurer. However, most insurers involved have strong solvency and are not a major concern,' said an insurance executive. The Air India place was a Boeing 787-8 Dreamliner, one of the most modern passenger aircraft in service. Reports suggest it was the first crash for the Dreamliner, which began commercial flights in 2011. 'The loss will be fully paid because it is a total loss with no salvage value. This means the entire $80 million is payable to cover the aircraft. However, additional claims for passenger liabilities and third-party liabilities make the situation complex. The Indian lead insurer will head the claim process, but only about 10 per cent of the payout will come from Indian insurers, with the balance placed with reinsurers. The liability portion, which could reach an estimated $50 million, will also be covered, but it will go through a legal process, taking time to resolve. This brings the total potential loss to around $130 million,' said Sourav Biswas, business head (aviation insurance), Alliance Insurance Brokers. Experts say this incident is likely to harden reinsurance rates for aviation policies, depending on the losses the reinsurers make. 'This event will also harden rates for the aviation insurance,' Biswas said. Narendra Bharindwal, president, Insurance Brokers Association of India, said: 'In cases involving large commercial aircraft such as the Boeing 787, insurance coverage is substantial and structured globally. Aviation-insurance programmes for major airlines such as Air India are arranged on a fleet basis and reinsured across international markets like London and New York. No single insurer bears the entire risk. Coverage is widely distributed among global reinsurers, with shares as small as 1.5-2 per cent and a lead reinsurer typically taking 10-15 per cent.' 'The financial impact of such incidents is shared globally across this network. While immediate premium adjustments are unlikely, the cumulative effect of multiple aviation incidents worldwide—including this one—will influence renewal terms and premiums for the sector in the next underwriting cycle. This incident, along with others in recent months, will likely result in a hardening of the aviation insurance market, not just for the airline involved but across the entire aviation sector,' he said.
News18
26-04-2025
- Automotive
- News18
Self-Driving Car Is No More Surprise: Here's What Alphabet CEO Sundar Pichai Says About Project
Last Updated: Alphabet CEO Sundar Pichai revealed that the company has completed over 250,000 paid passenger trips every week, which has grown compared to last year. As the technology is growing with each passing day, top car makers are trying their best to bring AI-powered self-driving cars globally. Amid the tight fight, the race has been led by the America-based driving technology named Waymo as it has reached a significant development, and is offering a futuristic way of travelling. Sharing the views about the development, Alphabet CEO Sundar Pichai revealed that the company has completed over 250,000 paid passenger trips every week, which has grown compared to last year. The growing numbers clearly show the improving demand for passengers in the vertical, asking for more and more futuristic options to travel using driverless vehicles. The company Waymo is putting efforts to make the driveless travelling into reality, making it possible and creating a wave of 'transportation innovation" in the segment. It has been reported that Google's parent company said that Waymo has been spreading its roots overseas, and has already had a strong start this year. It is spreading the service in multiple the United States, allowing the interested ones to enjoy the ride effortlessly. Services and Pilot Project The reports suggested that the company has unlocked commercial services in Phoenix and San Francisco, while Austin has received it as the pilot programme. Once the company sees a positive result on the same, it will be introduced in a concrete manner. The company is also gearing up to introduce the service to the public in Atlanta, aiming for expansions to Washington, D.C. and Miami. The deadline has been set for 2026. First Published:
Forbes
04-04-2025
- Automotive
- Forbes
These Vehicles Will Be The Least Affected By Trump's Tariffs, Statistics Show
If there's one thing that's for certain about President Trump's twisted labyrinth of international trade tariffs, it's that U.S. consumers will pay more in the months ahead for a new car, truck or SUV. As it stands so far, a 25% tariff on all cars and light-duty trucks imported into the U.S., along with major components like engines, transmissions, powertrain parts and electrical components went into effect on April 2. While that was 24 hours too late to be considered an April Fool's Day prank, it's still going to feel like slipping on a banana peel for new vehicle buyers, though some will likely suffer more than others. At one time it used to be crystal clear that a vehicle coming from either of the 'Big Three' Detroit automakers would be considered 100% American, while those being brought here from Europe or Japan (and later South Korea) would fall cleanly into the import category. However, the lines between the two distinctions have blurred considerably in recent decades. Import brands including Toyota, Honda, Nissan, Kia, Subaru, Hyundai, Merecedes-Benz, and BMW now build hundreds of thousands of vehicles in America-based factories. Conversely, some models from the domestic brands are assembled in Canada and Mexico, or are imported directly from South Korea, Italy or China. Sources suggest around 46% of all new vehicles sold in the U.S. last year were built elsewhere in the world. And thanks to globalization, even the 'most American' cars and trucks contain some measure of imported content. Reports say that most cars built in the U.S contain 40% to 50% or more import-sourced parts and materials. Parsing out the math on each model coming off a U.S. assembly line to determine the exact tariff to be applied can be a daunting challenge. It's made head-achingly complicated in that major components and the vehicles themselves often crisscross borders multiple times on the way to their final assembly and ultimately dealers' showrooms These would most likely pile on the tariff charges in the process, perhaps to ridiculously high amounts. Plus, the exact percentage of imported content on a given model might vary from one trim level to another, or may depend on which options are included. Also, it's unsure how much of a given model's tariffs will be passed on directly to consumers or will be absorbed by the automakers as part of the cost of doing business, either as per-model price increases or 'additional tariff charges' noted on their Monroney stickers. Some analysts predict the average new-vehicle's sticker price could well swell from around $5,000 to as much as $15,000 when all is said and done. As it stands, such price increases may take some weeks, and perhaps months to fully surface, depending on the breadth of vehicles and parts already in the supply chain (and there's always the possibility Trump will change course on imported cars and other goods in one direction or the other in the coming weeks and months). Astute car shoppers will want to know before setting foot on a showroom floor which models will inherently carry less of a tariff penalty than others. Already Ford has started a 'From America, For America' ad campaign that highlights its most-American models. Since determining which vehicles for sale are more domestically contented than others can be a daunting challenge, the National Highway Traffic Safety Administration (NHTSA) requires automakers to provide consumers with data regarding the country of origin of every vehicle (and their components) sold in the U.S. The estimated percentage of North American parts used, where the vehicle is assembled and countries of origin for the engine and transmission is noted on each new vehicle's so-called 'Monroney' sticker. Rather than having to visit one showroom after another to gather this information, American University's Kogod School of Business compiles its annual 'Made in America Auto Index' to determine which current new vehicles contribute the most to the U.S. economy. In addition to where a car or truck is assembled and the origin of the engine, transmission, body, interior, chassis, electrical and other components, the study accounts for where research and development was conducted and in which country the profits generated by each model ultimately wind up. Unfortunately, since the index is based in part on the aforementioned information compiled and issued by NHTSA, it's not 100% accurate with regard to assembly and component content coming from Canada, as the agency treats both U.S. and Canadian (but not Mexican) assembly and content as being North American, and therefore domestic in origin. Trump's pal and DOGE advisor Elon Musk stands to come out the most ahead in the tariff wars, as Tesla leads the industry with an average 81% domestic content, placing five of its models atop the current index. While one tends to think of pickup trucks being all-American vehicles, the highest rated model in the genre is the Honda Ridgeline, being tied for ninth place and sitting way higher than the industry's top-selling F-150 truck (at number 22) in Kogod's current index. These are the models the current Made in America Auto Index says are most likely to be slapped with the lowest tariffs moving forward, with their estimated percentages of domestic content noted: 1. Tesla Model 3 Performance (87.5%) 2. Tesla Model Y (85.0%) 3. Tesla Cybertruck (82.5%) 4. Tesla Model S (80.0%) 4. Tesla Model X (80.0%) 4. Ford Mustang GT (80.0%) 5. Honda Passport (76.5%) 6. Jeep Wrangler (76.0%) 7. Volkswagen ID.4 AWD (75.5%) 7. Chevrolet Colorado (75.5%) 7. GMC Canyon (75.5%) 8. Volkswagen ID.4 RWD (74.5%) 9. Honda Odyssey (74.0%) 9. Honda Ridgeline (74.0%) 9. Honda Pilot (74.0%) 10. Lincoln Corsair (73.5%) 11. Lucid Air (73.0%) 11. Mustang GT w/manual trans (73.0%) 12. Chevrolet Corvette Z06 (72.5%) 13. Lexus TX 350 (71.5%) 13. Acura RDX (71.5%) 13. Honda Accord (71.5%) 13. Acura TLX (71.5%) 13. Acura Integra A-Spec (71.5%) 14. Tesla Model 3 RWD (70.0%) 14. Chevrolet Corvette Sting Ray (70%) 15. Chevrolet Malibu (69.5%) 15. Cadillac XT4 (69.5%) 16. Kia K5 (69.0%) 16. Kia Sorento (69.0%) 16. Honda CR-V (69.0%) 16. Honda Civic (69.0%) 16. Acura Integra (69.0%) 16. Cadillac CT5 (69.0%) 16. Cadillac CT4 (69.0%) 17. Chevrolet Tahoe 4WD Diesel (68.5%) 17. Cadillac Escalade (68.5%) 17. Chevrolet Suburban 4WD Premier (68.5%) 17. GMC Yukon 4WD Denali (68.5%) 17. Chevrolet Silverado Crew Cab 4WD Diesel (68.5%) 18. GMC Hummer EV (68.0%) 19. Tesla Model 3 Long Range (67.5%) 20. Toyota Camry (67%) Source: American University's Kogod School of Business Made in America Auto Index. The full list of cars can be found here.
