Air India has renewed its aviation insurance cover with a modest increase of around 10% in premium, even as it continues to process substantial claims linked to one of the most serious accidents in its recent history.
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Air India has renewed its aviation insurance cover with a modest increase of around 10% in premium, even as it continues to process substantial claims linked to one of the most serious accidents in its recent history.
The Tata Group-owned carrier will pay about $33 million in premiums for the current cycle, up from roughly $30 million previously, according to original reporting by The Indian Express. The limited increase reflects favourable global market conditions and competitive underwriting, despite elevated risk exposure.
The renewal comes against the backdrop of claims estimated at $475 million following a fatal crash on the Ahmedabad to London route on June 12, 2025.
The accident occurred shortly after take-off and resulted in the deaths of 241 passengers and 29 people on the ground, making it one of the most devastating incidents involving the airline.
Despite the scale of the loss, insurers did not significantly harden pricing, underscoring the resilience of global aviation insurance markets.
Market participants in London, cited by The Indian Express, attributed this to continued softness in reinsurance conditions, where ample capital and competition have absorbed losses without materially pushing up premiums.
The renewed policy continues to cover a broad risk base across the airline’s operations.
Key details of the insurance structure include:
The scale of coverage reflects the airline’s expanded footprint following consolidation within the group.
The policy is underwritten by a mix of domestic insurers, with reinsurance support from global players.
Primary insurers include:
Nearly 95% of the risk is reinsured with global players led by AIG, AXA and Allianz. GIC Re also participates, including a 4% obligatory share.
Insurance market participants told The Indian Express that the airline paid a one-time adjustment linked to claims, but did not face broad-based premium hikes from reinsurers.
This aligns with commentary from Willis, which noted that although 2025 saw frequent and costly claims, underwriting capacity remained intact because not all insurers are exposed to every loss.
Willis added that the aviation insurance market had been broadly profitable between 2021 and 2024, allowing insurers to treat 2025 as an exceptional year rather than a structural shift in risk pricing.
The latest renewal also follows a prior cycle in which the airline’s insured value increased significantly without a rise in premium.
After the integration of Vistara, the sum insured rose from $12 billion to $20 billion, while the premium remained around $30 million.
The current increase therefore reflects a limited correction rather than a sharp repricing of risk, even after a major loss event.
Also Read: Tata and Singapore Airlines in talks to fund Air India after ₹22,000 crore loss
Data from the General Insurance Council indicates that overall gross premium underwritten by Indian insurers declined by 0.8% to Rs 1,089.27 crore in FY26.
Within this, New India Assurance accounted for Rs 436 crore, highlighting the continued importance of large public sector insurers in aviation risk underwriting.
Air India’s renewal highlights how global reinsurance capacity and competitive dynamics can cushion even large, high-profile losses, allowing airlines to maintain cost stability.
The durability of this trend will depend on whether underwriting capacity remains strong and whether claims frequency moderates after a volatile period.
For now, the airline has secured continuity in coverage at manageable cost levels, even as it continues to navigate long-tail liabilities from a major accident.
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