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Ashwini Phadnis

The airline expects fierce competition between the public and private sector insurers for aviation-related business also.

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New Delhi Feb. 26 Private sector insurance company Cholamandalam MS General Insurance has won the mandate to provide non-aviation related insurance cover to Air India for 2007-08.

"The airline has managed to bag a 25 per cent reduction in the insurance pay out while there has been an increase in the cover being provided. The cover will be to the tune of about Rs 1,800 crore," an official said without divulging exact details of what the airline payout would be.

Non-aviation related insurance cover provides protection to building, machinery, equipment and vehicles among others.

This year the 12 existing insurance companies including the four public sector and eight private sector companies were in the fray, sources indicated.

This is the second consecutive year that the private sector has bagged the contract for providing non-aviation related insurance cover to the state-owned carrier. Last year, the mandate was won by IFFCO-Tokio General Insurance Company.

The airline now expects to see fierce competition between the public and private sector insurance companies for its aviation-related business also.

Air India received bids from all the 12 insurance companies and is to take a decision by the end of March.

"Almost all the private airlines have awarded the contract for insuring their fleet to private sector companies. This year, we are likely to see keen competition in Air India also for the award of the aviation insurance contract," sources said.

Since its inception in 1954, Air India has always awarded the contract to public sector companies.

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