Air India tragedy could cost insurers $475 million, says GIC

Air India’s recent Boeing 787 Dreamliner crash near Ahmedabad may result in insurance claims totaling $475 million (around ₹4 000 crore), according to state reinsurer GIC. This potential payout could exceed previous aviation claim records in India.

GIC Re Chief Ramaswamy Narayanan explained that the bulk of projected payouts stem from liability claims, such as passenger fatalities, crew deaths, and third-party property damage—amounts that could exceed 2.5 times the aircraft’s hull value

In April 2025, Air India increased the insurance cover for the crashed aircraft from ₹750 crore to ₹850 crore, following an engine replacement earlier that year.

GIC Re’s estimates factor in the raised hull coverage alongside liability costs, which may include survivor benefits, compensation claims, and ground damage.

Aviation insurance programmes typically spread risk among domestic insurers and international reinsurers. Tata AIG serves as lead insurer, with support from New India Assurance, ICICI Lombard, and others—while most liabilities are reinsured globally.

Experts warn that this massive payout could impact future aviation insurance premiums worldwide, with Aviation rates expected to rise, especially in markets deemed riskier like India.

Furthermore, legal liabilities may add another ₹1,000 crore (~$120 million) to Air India’s burden, driven by family compensation claims, possibly taking total liabilities toward ₹10 billion.

These claims stem from loss of life, injuries, property damage, and legal actions taken by victims' families.