GIC likely to take a ₹35-cr hit

General Insurance Corporation, the country's sole domestic reinsurance company, is expecting a claim of ₹35 crore in Malaysia Airline whose plane carrying 298 passengers was shot down over eastern Ukraine.

Ashok Kumar Roy, Chairman and Managing Director of General Insurance Corporation, said the re-insurer has 3 per cent share in the liability insurance for the aircraft. “We have a 3 per cent share in the liability insurance, so the claim will come to around ₹35 crore,” said Roy. GIC participates in a consortium of global re-insurers who underwrite protection for insurance companies, which, in turn, insure to spread the risk among global re-insurers.

The country’s largest general insurance company, New India Assurance has a 1 per cent share in the comprehensive package policy of the aircraft which covers damage to the aircraft and liability. “We expect the loss to be limited to ₹12 crore as have reinsured our exposure,” said G Srinivasan, Chairman and Managing Director of New India Assurance. Srinivasan said the major claim is expected to come from passenger liability.

In March, GIC Re paid a claim of ₹75 crore as it had a 3.5 per cent share in Malaysia Airline Flight MH370, which is yet to be traced despite extensive search operations conducted by several countries.

According to reports, AGCS, a division of Germany’s Allianz SE, is the lead re-insurer covering the aircraft, which London-based insurance broker Aon Plc has valued at about $97.3 million.

The accident is expected to push up the premium for aviation insurance and reinsurance.

COMMENT NOW