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Informa Insurance News 24

AIR INDIA SIGNS DEAL WITH RELIANCE GENERAL

National Aviation Co of India, which operates the Air India fleet, has signed an insurance deal for $8.9bn for 153 planes for a premium of $24.23m, according to local reports. The contract has been signed with a consortium led by non-state Indian insurer Reliance General. HDFC Ergo, Bajaj Allianz and Iffco Tokyo General are also reported to be part of the consortium. The lead reinsurers were said to be Mitsui Sumitomo Insurance Co and Liberty Mutual. Air India previously insured with state-owned companies. Despite increasing its level of cover from $6.9bn to $8.9bn Air India was reportedly unhappy at being asked to pay a higher premium. The Reliance General consortium was the lowest bidder and was awarded the contract on September 9, with the policy coming into effect from today. However, on September 16 Reliance was reported to have written to Air India noting "a new loss situation" — an Air India Boeing 747 catching fire on the runway on September 4 — that required an increase in premium above the $24.23m agreed upon. Reliance reportedly had faced an increase in its reinsurance premium as a result. At this point India's public sector norms came into play, with Air India faced with the choice of either breaking the rules or having its entire fleet grounded for being uninsured.

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