Japan Airlines Collision Prompts Increase in Aviation Insurance Rates

Summary

  • Multinational insurance corporation AIG has not given immediate comment on the aviation incident.
  • An Airbus A350 of Japan Airlines was in a collision with a De Havilland Dash-8 Coast Guard turboprop, all of its 379 passengers evacuated safely.
  • The smaller aircraft resulted in five of six crew fatalities following the accident.
  • Information from trade magazine The Insurer highlighted the AIG insurance aspect of this story.
  • The standard insurance policy of Japan Airlines mostly covers hull damage, as highlighted by a source.
  • In typical situations, large scale commercial insurance deals are distributed amongst numerous insurance companies.
  • Recent global conflicts in Ukraine and Israel-Gaza has proved last year to be a struggle for the aviation insurance industry, as stated by insurance broker Gallagher.

AIG and the Aviation Incident

AIG did not issue a direct response regarding the incident. The Japan Airlines Airbus A350 collision which involved all 379 passengers on board with a De Havilland Dash-8 Coast Guard turboprop, resulted in a safe evacuation. Tragically, this was not the case for the smaller aircraft that lost five of its six crew members.

Insurance Coverage and Market Challenges

Details of the AIG’s insurance relation were first publicized by The Insurer, a trade magazine. Sources revealed the prime coverage of the Japan Airlines insurance policy on hull damage. These large-scale commercial insurance deals are typically allocated amongst multiple insurance providers.

In a recent report released by insurance broker Gallagher, he described the previous year as testing times for the aviation insurance market primarily due to geopolitical conflicts in regions like Ukraine and Israel-Gaza.

Reports from Gallagher’s reinsurance unit stated that aviation reinsurance rates experienced a surge of 25% during the reinsurance renewal date on 1st January 2024.

This incident could potentially have effects on forex trading, particularly for the Japanese Yen, and other assets associated with Japan Airlines and the aviation industry as a whole.

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