Tata AIG General Insurance and others have received the contract to provide $10bn cover to Air India and its low-cost international subsidiary Air India Express, Business Standard has reported.
Under the contract, the airline will pay $30m premium this fiscal year, which began on 1 April.
Tata AIG General Insurance, a joint venture between AIG and Tata Group, has bagged a significant share of insurance premiums, becoming the “lead insurer.”
The leader will receive around 36% of the premium and higher risk compared to the rest of the members in the consortium.
According to an industry source, the airline secured a good deal for its entire fleet despite the ongoing Ukraine conflict.
The airline was provided an insurance cover of $8bn last year. It plans to increase its cover to $10bn this ongoing financial year as it will likely increase the fleet.
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By GlobalDataIt is stated in the report that the insurance cover is for Air India’s 140 aircraft and Air India Express’ 26 Boeing 737 aircraft.
Other insurers in the consortium, apart from Tata AIG and NIA, include GIC Re, United India Insurance, Oriental Insurance Company, and ICICI Lombard General Insurance.
As International Practice states, the local companies will send 95% of the premium and risk to the foreign reinsurers. AIG is one of the key leaders in the aviation reinsurance market.
