Air India has finalized its insurance deals for the new financial year starting April 1, 2023. Tata AIG General Insurance, part of the Tata Group that also owns Air India, has emerged as the biggest insurer this year.
Air India will pay a premium of $30 million this financial year that will provide an insurance cover of $10 billion, including for its low-cost international subsidiary Air India Express.
Tata AIG General Insurance has been given 36% of the premium this year, with the rest distributed among others. Tata AIG General Insurance is a joint venture between the Tata Group and American International Group.
Tata AIG received a 30% share in the coverage last year, while New India Assurance took a share of 40%.
Other than these two companies, GIC Re, United India Insurance, Oriental Insurance Company, and ICICI Lombard General Insurance have also been reported to be the insurance providers for Air India this financial year.
According to a report in Business Standard, the current insurance cover is for Air India’s 140 aircraft and Air India Express’ 26 Boeing 737 planes.
Indian insurance companies retain only 5% of the premium and pass on the rest to foreign insurers to keep their books risk-free.
Since last few months news of Air India finalizing an insurance deal were circulating and several insurance companies were keen on doing a deal with Air India with the large aircraft order and the backing of TATA brand. It was also reported that several Europe-based multinational companies met the airline’s officials in London to discuss the structure of the insurance deals.