After placing the massive aircraft order with Airbus and Boeing, the airline is now in talks with multiple insurance companies to discuss the structure of insurance deals. As per reports, several Europe-based multinational companies met the airline’s officials in London to discuss the structure of the insurance agreements.
It is said that Tata AIG General Insurance is the top contender followed by The New India Assurance Company, Oriental Insurance Company, United India Insurance, and National Insurance Company.
Air India, as a part of Tata Group along with Singapore Airlines as partners, is in a much better position to negotiate the terms of aircraft insurance.
Last year, the total cost to cover 117 aircraft of Air India and 24 aircraft of Air India Express came to around $36 million. Of this, around $32 million was for the Air India fleet alone.
Last year, the airline’s insurance premium was decided after plenty of negotiations by the new management in India and London. In the end, Air India got a cover of $8 billion for its planes, although the premium was slightly more than the $31 million it paid the year before.
Last year, New India Assurance took 40% share of Air India’s insurance cover while Tata AIG received 30% share of the pie. Indian insurance companies retain only 5% of the premium and pass on the rest to foreign insurers to keep their books risk-free.
Now, with 500 aircraft joining the Air India fleet over the next decade, it is certainly a lucrative airline for insurance companies to do business with.