James Vickers, chairman of Willis Re International said liability
claims related to the Ethiopian Airlines crash and the grounding of
Boeing 737 MAX 8 aircraft could be the largest non-war aviation
reinsurance claim on record.
claims related to the Ethiopian Airlines crash and the grounding of
Boeing 737 MAX 8 aircraft could be the largest non-war aviation
reinsurance claim on record.
 |
| James Vickers: Chairman Willis Re International |
He said the claims, that could total around a billion dollars would gravely hit reinsurers’ profitability.
The crash of Ethiopian Airlines flight ET 302 on March 10 killed 157
passengers and crew, the second deadly crash involving a Boeing Co 737
MAX 8 airliner in five months.
passengers and crew, the second deadly crash involving a Boeing Co 737
MAX 8 airliner in five months.
As the crash site and black boxes are investigated, the 737 MAX 8 has
been grounded worldwide as a precautionary measure and regulators are
stepping up action to improve air safety while Boeing is carrying out a
software upgrade to the plane’s automated flight control system.
been grounded worldwide as a precautionary measure and regulators are
stepping up action to improve air safety while Boeing is carrying out a
software upgrade to the plane’s automated flight control system.
Vickers said the claims would arise from liability claims for the
passengers’ loss of life and in relation to the grounded aircraft, a
large sum for the aviation reinsurance market which he said was “very
small and very, very specialist”.
passengers’ loss of life and in relation to the grounded aircraft, a
large sum for the aviation reinsurance market which he said was “very
small and very, very specialist”.
Reinsurers help insurers share the cost of large claims, in return for part of the premium.
The losses could erode three to four years of aviation reinsurers’
premium in the “global excess of loss” category of reinsurance, Willis
Re said on Monday in its summary of reinsurance activity at the key
April 1 renewal date.
premium in the “global excess of loss” category of reinsurance, Willis
Re said on Monday in its summary of reinsurance activity at the key
April 1 renewal date.
In excess of loss reinsurance, the insurers are on the hook for the
first part of the claim, and reinsurers only pay out on claims above a
certain level.
first part of the claim, and reinsurers only pay out on claims above a
certain level.
The world’s biggest reinsurers include European firms Munich Re,
Swiss Re and Hannover Re, U.S. billionaire global investor Warren
Buffett’s Berkshire Hathaway and companies operating in the Lloyd’s of
London market.
Swiss Re and Hannover Re, U.S. billionaire global investor Warren
Buffett’s Berkshire Hathaway and companies operating in the Lloyd’s of
London market.
British insurer Global Aerospace led a consortium of insurers and reinsurers providing cover for Boeing.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
