Latest news with #AmitAgarwal
Mint
19 hours ago
- Business
- Mint
Air India plane crash: How is aviation insurance payout calculated? Will it be India's costliest? Experts decode
Air India Plane Crash: The Montreal Convention will be governing the insurance payouts to nominees of the passengers who died in the Air India plane crash in Ahmedabad on Thursday, experts have said. While Air India may declare an interim payout, the actual compensation will depend on the coverage purchased by the airline. India is a signatory of the Montreal Convention, applicable provisions of which will be applied while implementing the insurance payouts, they said, according to a report by PTI. According to Prudent Insurance Brokers vice president (aviation & specialty lines) Hitesh Girotra, the minimum liability applicable to the airline operator will be dependent on the nationality of the passengers who lost their lives. While an interim compensation may be announced by the airline, the final insurance payouts for passengers will be determined under the Montreal Convention of 1999, to which India became a signatory in 2009, brokerage firm Howden (India) MD and CEO Amit Agarwal said. "Compensation is calculated using Special Drawing Rights (SDRs), which stood at 128,821 SDRs (approximately $1.33 per SDR) as of October 2024. The actual payout will depend on the coverage purchased by Air India," Agarwal was quoted as saying by PTI. According to Amit Agarwal, the compensation for the Air India aircraft damage will be covered under the aviation hull all-risk section. This includes insurance for the current valuation of the aircraft, including spares and equipment. For a Dreamliner, depending on its configuration, age, and other factors, this value can range between $211 million and $280 million, he said. 'The aircraft involved (VT-ABN) was a 2013 model and, based on available information, was insured for approximately $115 million in 2021. Whether the damage is partial or total, the loss would be covered based on the value declared by the airline,' he said. According to Narendra Bharindwal, president, Insurance Brokers Association of India (IBAI), 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 per cent to 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,' he said. Currently, Air India and IndiGo are the two Indian airlines operating the Boeing 787 planes. Of the 34 B787s in the Air India fleet, 27 B787-8s are legacy aircraft. The first of the legacy B787-8 is slated to go for retrofit in July. The remaining seven B 787-9 joined the Air India fleet after the merger of Vistara with it last year. Globally, the Ahmedabad crash is the first time that hull loss has happened for a B787 aircraft, according to an official.
News18
a day ago
- Business
- News18
Air India Crash: Insurance Claims May Reach Up To Rs 1,000 Crore, Is This India's Costliest Airline Tragedy Yet?
While the aircraft damage will be covered in $280-million insurance coverage, the biggest cost will come from the 'liability insurance'. Insurance claims may reach Rs 1,000 crore. In India's one of the deadliest airline tragedies, a London-bound Air India Flight 171 crashed on June 12 claiming a total of 241 lives on board. Few also died in the doctors' hostel where the Boeing 787-8 Dreamliner aircraft fell near the Ahmedabad airport. Air India has announced a compensation of Rs 1 crore each to the families of those lost their lives. However, the flight crash will also trigger insurance claims, which, as per estimates, might go as high as Rs 1,000 crore. Airline liabilities in the event of death or injury are governed by international conventions such as the Montreal Convention, 1999, to which India is a signatory, according to experts. They said that under the Convention, airlines are liable to pay: Up to 128,821 Special Drawing Rights (SDRs) (about $1.33 per SDR), as of October 2024, per passenger in case of death or bodily injury, irrespective of fault. Compensation beyond that limit is also possible if the airline is proven negligent. While interim compensation may be announced by the airline, final compensation for passengers will be determined under the Montreal Convention of 1999, to which India became a signatory in 2009, brokerage firm Howden (India) MD and CEO Amit Agarwal told news agency PTI. 'Compensation is calculated using Special Drawing Rights (SDRs), which stood at 128,821 SDRs (approximately $1.33 per SDR) as of October 2024. The actual payout will depend on the coverage purchased by Air India," Agarwal said. On Thursday, June 12, a London-bound Air India plane carrying 242 passengers and crew crashed moments after taking off from Ahmedabad International Airport. Of these, 169 are Indian nationals, 53 are British nationals, 1 Canadian national and 7 Portuguese nationals. Air India has insured its entire fleet under a $20-billion global aviation insurance programme. This insurance is divided into two parts — one for damage to the aircraft itself (called 'hull insurance') and the other for legal and passenger claims (called 'liability insurance"). As far as aircraft damage is concerned, Agarwal said, it would be covered under the aviation hull all-risk section, which insures the current valuation of the aircraft, including spares and equipment. For a Dreamliner, this value can range between $211 million and $280 million, depending on its configuration, age, and other factors, he added. 'The aircraft involved (VT-ABN) was a 2013 model and, based on available information, was insured for approximately $115 million in 2021. Whether the damage is partial or total, the loss would be covered based on the value declared by the airline," he said. Narendra Bharindwal, president of the Insurance Brokers Association of India (IBAI), told PTI that 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 per cent to 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," Bharindwal said. It is too early to ascertain the overall liability (passengers and third party) on the operator because of this crash. Overall Insurance Claims While the aircraft damage will be covered in the $211 million-$280 million insurance coverage, the biggest cost will come from the 'liability insurance'. Experts also said the actual amount the passenger receives will depend on a number of factors. Typically, the claimant (family of the deceased passenger or the injured) has to prove the extent of the actual damage suffered. Factors such as age of the deceased passenger, educational status, employment, last salary drawn, marital status, general economic status, the number of dependants the extent of dependency are, typically, considered to assess the damage. According to 'The (overall) claim could go as high as Rs 1,000 crore and could have a ripple effect on the aviation insurance industry." It is being considered to be one of the deadliest and costliest airline crashes in the Indian aviation history. Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates—only on News18. Also Download the News18 App to stay updated! tags : Air India crash Location : New Delhi, India, India First Published: June 13, 2025, 10:57 IST News business Air India Crash: Insurance Claims May Reach Up To Rs 1,000 Crore, Is This India's Costliest Airline Tragedy Yet?
Hans India
a day ago
- Business
- Hans India
Raymond to list property biz on stock markets
New Delhi: Raymond Ltd will list its real estate business on the stock exchanges in the second quarter of this fiscal year as it has demerged this vertical to tap immense growth opportunities. Raymond Ltd has successfully demerged the real estate business after getting all regulatory approvals and will now focus on engineering vertical. 'We have successfully demerged our real estate business and received all necessary approvals, and we expect to be listing the real estate business in the second quarter of FY26,' Raymond Ltd Group CFO said Amit Agarwal told analysts. According to a transcript of management discussion with markets analysts, Agarwal said the demerger will position Raymond Realty to pursue its growth trajectory as an independent pure-play real estate business. Mumbai-based Raymond Ltd is one of the leading real estate firms in the country. It sold properties worth Rs2,310 crore in the last fiscal year as against Rs2,249 crore in the preceding year. The demerger scheme has become effective from the May 1, 2025, and the record date is May 14, 2025 for the purpose of determining the eligible shareholders of demerged company, Raymond Ltd, to whom the equity shares of the resulting company, Raymond Realty Ltd, would be allotted in terms of the scheme.
Indian Express
a day ago
- Business
- Indian Express
Air India plane crash: Victims' kin may get up to Rs 1.5 cr each as insurance compensation
The crash of Air India's Boeing 787-8 Dreamliner won't have any financial impact on the Tatas which own the airline as the aircraft is insured and people who perished in the crash will get suitable compensation from insurance companies. As per the Montreal Convention treaty, the Air India will have to pay a compensation of around Rs 1.5 crore each to the kin of victims of the plane crash. Air India will get adequate compensation for the lost aircraft from insurance companies. While interim compensation may be announced by the airline, final compensation for passengers will be determined under the Montreal Convention of 1999, to which India became a signatory in 2009. Compensation is calculated using Special Drawing Rights (SDRs), which stood at 128,821 SDRs (approximately USD 1.33 per SDR) as of October 2024. The actual payout will depend on the coverage purchased by Air India. Relatives of people who died in the crash will get around Rs 360 crore. 'The nationality of the passengers on board will define the minimum liability that is applicable to the operator as per Montreal Convention. Since the aircraft crashed into a residential apartment, there is 3rd party property damage liability on the operator,' said Hitesh Girotra, Vice President – Aviation & Specialty Lines, Prudent Insurance Brokers. In fact, Tata group insurance company will shell out the amount along with its foreign partner AIG of the US. Air India had renewed its mega $20 billion (Rs 171,000 crore) insurance policy with multinational AIG as the lead reinsurer on April 1. The primary insurers for the Air India policy are: Tata AIG General Insurance (lead insurer with over 40 per cent share), ICICI Lombard General Insurance, New India Assurance and other PSU general insurers. The final bill will be taken by the reinsurers. The airline had paid a premium of $30 million (Rs 257 crore), same as last year, for insuring over 300 aircraft. Aircraft damage would be covered under the aviation hull all-risk section, which insures the current valuation of the aircraft, including spares and equipment. 'For a Dreamliner, depending on its configuration, age, and other factors, this value can range between $211 million and $280 million. The aircraft involved (VT-ABN) was a 2013 model and, based on available information, was insured for approximately $115 million in 2021. Whether the damage is partial or total, the loss would be covered based on the value declared by the airline,' said Amit Agarwal, CEO and MD, Howden India. 'Understanding the age and the make of the aircraft, the hull agreed value of the aircraft would be roughly around $75-80 million which will be covered under the hull all risk part of the insurance,' Girotra said. This means Air India will get around Rs 680-980 crore as insurance amount for the lost aircraft. Almost 95 per cent of the Air India policy has been reinsured with a clutch of reinsurers led by AIG, Axa and Allianz. Public sector GIC Re also has a share in the policy including 4 per cent obligatory. The reinsurers will have to pay for 95 per cent of the claims, which will be accrued out of damaged aircraft, dead and injured passengers and third-party liabilities. Some people in the building, where the aircraft crashed, also died. There were 242 people on board. Insurance compensation for people perished in the crash will take its own time. The Boeing 787-8 Dreamliner has a list price of approximately $248.3 million. However, airlines usually secure substantial discounts, with actual sale prices typically falling between $150 million and $200 million. The liability section—likely the most significant component of the loss in the Ahmedabad incident—could amount to millions of dollars. 'This section covers the airline's legal liability to passengers and third parties, including medical expenses, cargo, and baggage losses. Early reports suggest the aircraft crashed into a civilian compound, which could result in substantial third-party claims,' Agarwal said. While interim compensation may be announced by the airline, final compensation for passengers will be determined under the Montreal Convention of 1999, to which India became a signatory in 2009. Compensation is calculated using Special Drawing Rights (SDRs), which stood at 128,821 SDRs (approximately $1.33 per SDR) as of October 2024. The actual payout will depend on the coverage purchased by Air India. 'Once coverage, ownership and financial interest in an aircraft is confirmed, the AIG Claims Promise works to provide immediate working funds of 50 per cent of AIG's share of the agreed amounts within 7 days,' AIG says in its website. On the industry impact, experts said this is a significant incident that could result in losses amounting to several hundred crores. The general aviation insurance premium market in India is estimated at around Rs 1,000 crore. 'While most large losses are reinsured, this event is expected to influence aviation insurance rates going forward,' Agarwal said.
Time of India
2 days ago
- Business
- Time of India
Air India crash set to trigger over Rs 1,000 crore insurance claims
MUMBAI: The crash of an Air India Boeing 787 Dreamliner in Ahmedabad has set off what may become India's costliest aviation insurance claim, with potential liabilities crossing Rs 1,000 crore, which is more than the total annual premium for the country's aviation sector. Tired of too many ads? go ad free now While the aircraft's age may help contain hull loss, the crash, which reportedly killed over 240 people and caused collateral damage on the ground near the airport, is expected to result in significant liability payouts. Air India has insured its fleet through a $20-billion aviation programme. Hull and liability coverage are split, with Tata AIG, a group company, underwriting part of the risk alongside other domestic insurers. The reinsurance structure is led by a global consortium including AIG, with participation from public sector entities such as New India Assurance and GIC Re. Shares of both fell following the incident by 4% and 3%, respectively. Amit Agarwal, CEO and MD at Howden India, said that aircraft damage would be covered under the aviation hull all-risk section, which insures the current valuation of the aircraft, including spares and equipment. The Dreamliner involved (registration VT-ABN), delivered in 2013, was insured for approximately $115 million in 2021. "Whether the damage is partial or total, the loss would be covered based on the value declared by the airline. " While the hull loss is substantial, liability claims are expected to be larger. "The liability section which is likely the most significant component of the loss, could amount to millions of dollars," said Agarwal, referring to passenger deaths and potential third-party claims from the crash site. Tired of too many ads? go ad free now Under the Montreal Convention of 1999, compensation to passengers is calculated in Special Drawing Rights (SDRs), with a current value of 1,28,821 SDRs, or roughly $1,71,000 per passenger. Further clarity came from Hitesh Girotra of Prudent Insurance Brokers, who estimates the hull value at around $75-80 million. "The liability on the operator will have multiple angles," he said. "The nationality of the passengers will determine the minimum liability under the Montreal Convention. "Additionally, there is third-party property damage liability, and possibly loss of civilian lives where the aircraft crashed." The scale and complexity of the claim reflect the evolving nature of aviation insurance. Narendra Bharindwal, president of the Insurance Brokers Association of India, offered a broader context: "Insurance coverage for large commercial aircraft such as the Boeing 787 is substantial and structured globally." He added, "Hull values can range between $200-300 million and liability cover for international routes often exceeds $500 million. " Air India's aviation programme, like others of its size, is reinsured across global markets. No single insurer bears the entire risk.
