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NDTV
a day ago
- Business
- NDTV
Air India Crash May Be India's Most Expensive Aviation Insurance Claim
The Air India plane crash on Thursday afternoon, which killed 241 passengers and crew on board, may become India's most expensive aviation claim, with liabilities ranging between $211 million and $280 million, translating to Rs 2,400 crore. Air India Boeing 787-8 Dreamliner, headed to London's Gatwick Airport, departed from the Sardar Vallabhbhai Patel International Airport in Ahmedabad at 1:38 pm. Within 32 seconds of take-off, the plane crashed as it failed to achieve lift. The passengers comprised 169 Indian nationals, 53 British nationals, 7 Portuguese nationals and a Canadian national. Only one British-Indian passenger, Vishwash Kumar Ramesh, survived the crash. Follow updates here According to Ramaswamy Narayanan, Chairman and Managing Director of the General Insurance Corporation of India (GIC), a public sector reinsurance company, an airline's fleet insurance policy typically covers risks such as aircraft hulls, spare parts, and liabilities to passengers and third parties. In the case of the Dreamliner crash, claims are expected under both the hull and liability sections as the Boeing turned into a ball of fire, killing hundreds of people. The valuation will depend on the age, configuration and other factors, ranging between $211 million and $280 million, said Amit Agarwal, CEO and MD at Howden India. The Dreamliner involved (VT-ABN) in the crash was a 2013 model and 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", Mr Agarwal added. The compensation for passengers will come under the Montreal Convention of 1999, to which India became a signatory in 2009. The compensation will be calculated under Special Drawing Rights (SDRs), with a current value of 1,28,821 SDRs, or roughly $1,71,000, which is Rs 1.47 crore. Additionally, third-party property damage liability and loss of lives at the crash site will also be counted. The Tata Group on Thursday announced a compensation of Rs 1 crore to the families of each person who lost their lives in the plane crash.
Economic Times
2 days ago
- Business
- Economic Times
Air India plane crash: At $120 million+, insurance claim to be costliest for Indian aviation
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The catastrophic crash of an Air India flight in Ahmedabad on Thursday is likely to trigger the costliest aviation insurance claim involving an Indian airline, with claims estimated to exceed $120 million, people familiar with the matter the estimated payout, the hull loss—the insured value of the aircraft— alone could be around $80 million, while passenger liability compensation could add between $30-50 total liability payout could be significantly higher, with one estimate pegging potential passenger-related claims at over $100 million, given the presence of several high-networth individuals AIG was the lead insurer and others including New India Assurance had written part of the policy. The aircraft was covered under a global reinsurance programme, placed in the London market, whereby most of the risk is ceded to international insurers like Tata AIG, New India Assurance, National Insurance, United India, Oriental and ICICI Lombard General have retained less than 10% of the risk, market participants said. State-owned reinsurer GIC Re has 5% on the reinsurance treaty and will see a claim of about $4.1 million, they said.'Today's incident… is expected to trigger claims under both the hull and liability sections due to the total loss of the aircraft and the fatalities. Such losses generally affect multiple reinsurers, as airline fleet policies are often placed on a facultative basis involving several participants. Since liability claims take time to quantify, it is currently difficult to assess the impact on future pricing," said Ramaswamy Narayanan, CMD of GIC Re.'This would be one of the biggestever claims involving an Indian airline,' said Sourav Biswas, aviation business head at Alliance Insurance Indian carriers have witnessed few major accidents. In 2010, a Boeing 737 operating from Dubai crashed on landing at Mangalore, killing 158. Another crash at Kozhikode in 2020 claimed 21 these two incidents led to insurance payouts of about $60–70 million, including hull and liability, insurance industry insiders said. A Tata AIG spokesperson said as the lead insurer for Air India, the company is closely monitoring the situation. Air India's liability limit is up to $1.5 billion, an inurance executive aware of the subject said. There could be around $250,000 per passenger potential liability for bodily injury or bodily injury leading to death, added the person who did not want to be named. The crash is likely to harden reinsurance rates across the board. Aviation insurance is a global pool, and any large loss in one part of the world impacts pricing everywhere.'This will affect renewals next year,' a senior reinsurance executive said.'Aviation rates may go up globally, and more so in markets like India where loss ratios have otherwise been benign.' Tata Group-owned Air India's aviation insurance policy is typically renewed on April 1 each year, with a panel of insurers led by global brokers in New India Assurance had traditionally led the placement for the national carrier, Tata AIG is understood to have taken over that role since the airline's privatisation. New India and other Indian insurers now hold supporting roles, industry executives said.
Indian Express
4 days ago
- Automotive
- Indian Express
Insurers may have to shell out money for cargo involved in 2 ship mishaps
The two recent ship accidents off the Kerala coast in the last weeks are expected to impact cargo insurance providers. While Indian cargo insurers had some exposure, the vessels involved were container ships carrying goods for multiple owners, which is likely to limit the impact on soft cargo premium rates. However, the vessel owners are expected to face higher costs, with increases anticipated in both hull insurance and protection & indemnity (P&I) premiums. Both vessels were smaller sized feeder vessels bringing import cargo containers to India, insurance officials said. Indian insurance market may have potential exposure under the marine cargo segment, GIC Re Chairman and MD Ramaswamy Narayanan said. 'On both these vessels the Indian cargo Insurers had exposure but since these were container vessels carrying cargo for multiple owners the likely impact on soft cargo premium rates will be minimal. However, for the vessel owners their hull insurance and P&I premiums will go up,' said Gaurav Agarwal, Vice President, Marine Speciality, Prudent Insurance Brokers. A clear picture of the value of cargo in both the ships are not known. Indian insurers reported a gross premium underwritten of Rs 5,535 crore in FY2025 in the marine insurance segment. Of this, Rs 3,940 crore was for marine cargo insurance. 'The first vessel MV Elsa 3 sank due to flooding in her holds and the latest one MV Wan Hai is still on fire with 18 crew members rescued and 4 missing, here the possible cause is dangerous cargo which caught fire which eventually spread due to high winds e.g. lithium batteries for EV's or hazardous chemicals,' Agarwal said. However, Indian insurers are unlikely to have any exposure in hull insurance — physical structure of the ships and machinery — of the two ships. There are three areas of insurance applicable to a cargo vessel — cargo insurance for insuring cargo, hull & machinery for insuring the vessel hull and equipment and protection & indemnity (P&I) which covers all possible liabilities which can happen on account of operating a vessel like pollution caused by oil spill. 'We are expecting no major impact on cargo premiums and on the shipping industry,' Agarwal said. According to GIC Re Chairman, as the vessel in question is foreign flagged, its hull and P&I insurance are not underwritten by Indian insurers. 'However, Indian insurance market may have potential exposure under the marine cargo segment. GIC Re, as a reinsurer, does not directly influence primary insurance rates, particularly in cargo lines that are not predominantly reinsurance driven. The impact on direct insurance pricing will be determined by the respective primary insurers,' Narayanan said. Hari Radhakrishnan, an expert with Insurance Brokers Association of India (IBAI) said the two events are disparate. 'One is a capsizing and the other is fire on board. Fires on container ships are not uncommon. The capsized ship reportedly sank due to ballast problem coupled with its structural age. To put the events in perspective, there are, at an average around 2700 shipping casualties and incidents each year. So, a couple of incidents near the Kerala coast does not indicate any pattern of higher casualty incidence or higher risk for ships passing through the shipping corridor, which has the potential of impacting marine premiums,' he said. MV Wan Hai 503, which caught fire between Beypore and Azhikkal ports, off Kerala coast on Monday, was carrying was sailing from Colombo to Mumbai. MSC ELSA 3, a Liberian container ship, sank off the Kochi coast on May 25 due to flooding, triggering a major environmental threat. The vessel sank with 640 containers, including 13 with dangerous cargo and 12 with calcium carbide. It was also carrying 84.44 MT of diesel and 367.1 MT of furnace oil. Marine insurance provides coverage for goods, ships, and other transport means against risks like damage, theft, or loss during transit. The policyholder pays a premium based on the value of the shipment and the associated risks. In the case of a covered incident, the insured files a claim, and the insurer compensates for the loss or damage as per the policy terms. Marine insurance can be customized to include coverage for specific routes, cargo types, or additional risks like piracy. This ensures businesses safeguard their financial interests during domestic or international trade.
Mint
23-04-2025
- Business
- Mint
Mid-market global capability centres tend to grow faster than larger peers, without burden of legacy issues: Nasscom
Technology centres of midsize global companies – with revenue up to $1 billion – tend to scale up faster than their larger peers because they are leaner, more agile and innovation-focussed, according to the National Association of Software and Services Companies (Nasscom). The global capability centres of mid-market companies can grow stronger on account of faster decision-making, smaller teams and higher focus on engineering and research, Nasscom and experts said. GCCs of top foreign companies such as Amazon, JPMorgan Chase, Boeing and Walmart operate as strategic hubs in India. They drive innovation and provide crucial support to the global operations of these companies in the areas of information technology, sales, human resources, marketing, and supply chain management. According to Nasscom, India is home to more than 1,760 GCCs, of which 480 are mid-market GCCs. These include Arctic Wolf Networks Inc, BlackBerry Ltd, IDP, and Modernizing Medicine Inc. 'While mid-market GCCs often start as outposts like their larger peers, they tend to progress 1.2x faster along the maturity curve, aided by focussed charters and closer reporting alignment to the GCCs," according to a Nasscom-Zinnov report released on 22 April. This is because of three key factors. 'The maturity of mid-market GCCs within the transformation hub category is largely driven by strong portfolio ownership, higher number of global roles and high R&D intensity, positioning them as innovation-focussed extensions of the enterprise," Nasscom and Zinnov said in their report, 'India's GCC Leap – Powering Global Mid-Market Momentum.' Most mid-sized GCCs are located in Bengaluru, followed by Hyderabad, the Nasscom report estimates. Together, the two cities make up for almost half of the 680 mid-market GCC units in the country. Units are smaller than centres and are similar to branches of GCCs. At least one expert said mid-market GCCs are sprouting in India driven by digitisation and the fear of becoming obsolete. 'In the past, India was a back office for global companies. Today, more and more mid-market companies are wanting to establish GCCs here because of the availability of digital talent, ease of doing business, and the fear of getting obsolete," said Viswanathan KS, a former Nasscom executive. According to another expert, a leaner team helps these GCCs grow quicker because they are more focused. 'With leaner teams and tighter budgets, these centres operate with a sense of purpose and urgency that's often lost in scale," said Ramaswamy Narayanan, chief executive officer of Bridgepath Solutions, a Bengaluru-based consulting firm that helps set up GCCs. 'They don't have the luxury of inefficiency, which means execution is sharper, alignment is tighter, and impact is faster. Most often, they build focused capabilities that are aligned to their business growth as opposed to mere run-and-operate type of work." Ramaswamy added that such GCCs grow faster because they are 'not burdened by legacy systems or complex hierarchies, they adapt quicker, integrate new capabilities faster, and evolve in sync with enterprise priorities." 'Mid-market GCCs can scale quicker than larger peers because they are more agile. Decision-making is also quicker because of higher global roles, and they also have the ability to hyper-specialise because of their smaller size," said an executive at the GCC of a large US bank. Still, these GCCs are fraught with challenges. For one, the parent companies are not as famous, and this can make it tougher for their GCCs to attract entry-level talent. 'Minimal brand presence restricts influence in local startup, talent and academic ecosystems," said the Nasscom-Zinnov report. 'Difficulty in establishing and scaling innovation partnerships with vendors, startups, and academia" is another challenge that mid-market GCCs face. The other issue is the tendency to wind up operations impulsively. 'They are also quite impatient when it comes to lack of results and may shut down as quickly as they set up if the results are not meeting their expectations," said Narayanan. Still, another expert said the share of mid-sized GCCs is expected to increase to more than 800 by 2030, making up more than a third of the GCC landscape in the country. 'The connect with the market will be way higher for mid-market GCCs," said Pari Natarajan, chief executive officer of Zinnov, adding that such GCCs would better understand the workings of their customers. Even as more such GCCs emerge, certain sectors hold out additional scope for them. 'While tech adoption leads, verticals like BFSI (banking, financial services and insurance), healthcare and professional services remain underrepresented in India's GCC landscape – offering untapped potential for specialised mid-market entrants," Nasscom said in the report. The emergence of mid-market GCCs comes as companies insource a chunk of their tech work. Traditionally, Indian software services companies would support the IT infrastructure for some of the largest companies including Morgan Stanley, Citibank, Apple and Amazon. However, with technology taking centre stage, most of these companies now hire teams directly to handle their technology work, cutting the reliance on IT outsourcers. At least three IT outsourcing companies – Accenture Plc, HCL Technologies Ltd and Cognizant Technology Solutions Corp – have called out risks from GCCs in their annual filings, even as they set up units to work with them.
