A.M. Best believes that the total insurance loss of Germanwings Flight 4U 9525, which crashed in the French Alps on 24 March, will comprise passenger liability claims and physical damage to the aircraft, and may put further pressure on the beleaguered aviation war sector.
In this new Best’s Briefing, entitled, “A.M. Best Comments on Impact of Germanwings Plane Crash on Aviation Insurance Market”, the rating agency notes that passenger liability claims will be covered as part of aviation “all risks” policies and will represent the majority of the overall loss. The level of liability costs are uncertain but will be linked to the nationality, earning potential and family status of the passengers and crew.
There is more certainty around the ultimate cost of physical damage, with the aircraft valued at USD 6.5 million. Early assumptions have indicated that the cause of the crash may be the result of deliberate pilot action. If this is correct, the insurers that underwrote the airline’s hull war policy, rather than its all risks policy, are likely to be liable.
For a full complimentary copy of the briefing, please click here.