Almost 95% of the Air India policy has been reinsured with a clutch of reinsurers led by AIG, Axa and Allianz. (Image: Air India)
Air India has renewed its aviation insurance at only a modest increase in cost, despite one of the most severe incidents in its recent history in Ahmedabad. The Tata group-owned carrier has secured coverage for the year with a premium that is about 10% higher than last year, reflecting resilience in negotiations aided by soft global market conditions.
Industry sources indicate that the airline will pay roughly $33 million in premiums this cycle, compared to approximately $30 million previously.
Air India did not respond to a mail from The Indian Express.
This renewal continues to cover an extensive risk portfolio, including about $20 billion in assets and liabilities across a fleet of nearly 300 aircraft. The airline’s liability coverage is understood to remain at around $1.5 billion.
The renewal has come at a time when Air India was dealing with claims estimated at $475 million, stemming from the tragic Ahmedabad-London Dreamliner crash on June 12, 2025. The accident occurred shortly after take-off and resulted in the loss of 241 passengers, along with 29 fatalities on the ground, making it one of the most devastating aviation disasters involving the airline.
Despite the scale of these claims, insurers did not significantly harden their pricing.
Market participants in London, a major hub for aviation insurance and reinsurance, attribute this to continued softness in the global reinsurance market. Ample capacity and competitive underwriting conditions have helped absorb the shock of large losses without sharply pushing up premiums for major carriers like Air India.
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The relatively small increase underscores how global insurance dynamics, particularly in aviation, can sometimes buffer even large, high-profile losses, allowing airlines to maintain financial stability while continuing to manage long-tail claims from major incidents.
“They had to pay one time penalty during the renewal because of massive claims and effectively there are no hikes in premium charged by the same set of re/insurers who had insured the airline last year,” said sources in the London market.
The primary insurers for the Air India’s insurance policy are — Tata AIG General Insurance (lead insurer with 45% share), ICICI Lombard General Insurance (7%), New India Assurance (32%), Oriental Insurance Company (14%) and other PSU general insurers.
Almost 95% of the Air India policy has been reinsured with a clutch of reinsurers led by AIG, Axa and Allianz. GIC Re also has a share in the policy including 4% obligatory.
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During the renewals last year, while the sum insured had increased, after Vistara merger — from $12 billion
to $20 billion — the premium outgo had remained unchanged at around $30 million.
Currently, Air India Group has nearly 300 aircraft — Air India has a fleet of around 187 planes, and Air India Express has over 110 planes.
While globally aviation insurance premiums were expected to inch up following a spate of accidents in 2025, Air India has managed to secure good rates, insurance officials said. This is because of the
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overall softness in aviation insurance market and deft negotiations by the company, they said.
According to Willis, one of the leading global aviation brokers, though 2025 has proved difficult for airline insurers when claims have been frequent and costly, it’s worth noting that claims activity doesn’t directly reduce underwriting capacity because not all insurers are involved in every claim, either as lead or following market and abundant capacity has restrained the increased rates. “The reality is that between 2021 and 2024, the airline book appears to have been broadly profitable for airline insurers, so there may be an opportunity to treat 2025 as a one-off, an “annus horribilis,” where previous results and current competition combined to suppress rate increases. If capacity remains buoyant, then this might be insurers’ only hope,” said Willis.
According to figures released by the General Insurance Council, overall gross premium underwritten by Indian insurers declined by 0.8% to Rs 1,089.27 crore during FY26.
Of this New India Assurance accounted for Rs 436 crore in FY26.
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