Thirty insurers to cover costs
Last week’s Germanwings Airbus crash is predicted to cost insurers $300m in claims and costs, according to Allianz.
But what makes up this total, and how could the disaster affect the aviation insurance markets?
According to insurance sources, 30 insurers will share the financial cost of the crash, which was believed to have been deliberately caused by the plane’s co-pilot.
The estimate includes the loss of the aircraft, at about $6.5 million, the recovery efforts, legal fees and compensation of the passengers’ families, according to GR’s sister title Insurance Times.
Liability claims from the families of the 144 passengers are expected to account for the most of the costs.
Lufthansa said on Friday it was offering to pay up to €50,000 ($54,115) in immediate financial assistance per passenger.
Underwriting data on co-insurers’ shares of eventual losses, supplied by an insurance industry source, showed Allianz with a 10% share, American International Group with 11% and Swiss Re with 7%, Reuters reports
Allianz, which has said it is the lead insurer, declined to comment, as did AIG. Swiss Re declined to comment on the case but said both Germanwings and its parent Lufthansa were among its clients.
Rating agency A.M. Best has said the Germanwings losses would also be absorbed by the Lloyd’s market
If the cause of the crash is proven to be deliberate pilot action, then A.M. Best believes that the insurers that underwrote Germanwing’s hull war policy, rather than its all risks policy, are likely to be liable.
However, the rating agency noted that the general glut of capacity in the aviation insurance sector more generally means that rates are unlikely to rise following the Germanwings crash.