Air India to go for highest insurance cover from MondayJune 29th, 2008 - 4:08 pm ICT by IANS
New Delhi, June 29 (IANS) National Aviation Co of India (NACIL), which runs the state-run carrier Air India, will go for a $6.5 billion insurance cover from Monday, the highest insurance coverage by any airline company in Indian sub-continent, said an airline official. All state-owned and private insurance firms are expected to bid for the business while some of them have already started discussions to forge alliances for the year long insurance period that will expire June 30, 2009.
The insurance cover will be provided to a fleet of the merged Air India, Indian (erstwhile Indian Airlines), Air India Express and Alliance Air, which in all are about 140 aircraft, said the official.
The 2007-08 insurance contract for Air India was bagged by a consortium led by the state-run New India Assurance Co Ltd with ICICI’s Lombard General Insurance Co Ltd as co-insurer.
The NACIL has already managed to get at least 15 percent discount on existing insurance rates for covering its non-aviation business in 2008-09. ICICI Lombard, scoring over state-run insurance companies and private companies, won the business.
The entry of private insurance companies into the aviation market has intensified competition in the business, resulting in lower premium rates. Among the private companies expected to bid for the NACIL tender are Bajaj Allianz, General Insurance Co Ltd, ICICI Lombard, Cholamandalam MS General Insurance Co Ltd and Reliance General Insurance Co Ltd.
Four public sector insurance firms, Oriental Insurance Co, New India Assurance Co, United India Insurance Co and National Insurance Co dominate the aircraft insurance business and cover NACIL’s competitors such as Jet Airways (India) Ltd, Kingfisher Airlines Ltd and Deccan Aviation Ltd.
Last year, the exposure value of Air India, before the merger with Indian took place, was around $3 billion covering around 50 aircraft. But this year - with increase in aircraft - the insurance cover would go up considerably, the official said.
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