US insurer AIG leads policy for Japan Airlines plane

In a recent development, US insurer AIG emerged as the lead insurer on a substantial $130 million all-risks policy for the Japan Airlines aeroplane involved in the collision at Tokyo's Haneda Airport. Although AIG refrained from making an immediate comment, industry sources confirmed its pivotal role in this significant insurance coverage.

Insurance arrangement

The collision, which involved a Japan Airlines Airbus A350 and a De Havilland Dash-8 Coast Guard turboprop, resulted in the tragic loss of five crew members on the smaller aircraft, while miraculously, all 379 passengers aboard the Airbus A350 escaped unharmed. Notably, the Japan Airlines policy predominantly addresses hull damage, as indicated by one of the informed sources.

The insurance arrangement for such large-scale commercial deals usually involves multiple insurers sharing the coverage. In this instance, Willis Towers Watson, identified as the primary broker for the deal, played a crucial role. Despite Reuters' attempts to gather insight, Willis Towers Watson opted not to comment on their involvement.

The aviation insurance market faced considerable challenges last year, particularly due to the conflicts in Ukraine and Israel-Gaza, according to a report by insurance broker Gallagher. As a result, aviation reinsurance rates surged significantly, marking an increase of up to 25 per cent during the critical reinsurance renewal on January 1, 2024, as outlined by Gallagher's reinsurance unit earlier this week.

This recent incident at Haneda Airport underscores the complexity and necessity of comprehensive insurance coverage in the aviation sector, driving insurers and brokers to navigate intricate challenges while striving to safeguard against potential risks in an ever-evolving landscape.

(with Reuters inputs)