(CTN News) – According to two sources in the insurance industry, AIG, a US insurer, was the Japan Airlines primary insurer for a $130 million “all-risks” policy for the Japan Airlines airplane involved in the collision at Tokyo’s Haneda airport.
This means that AIG would be responsible for covering the majority of the damages and losses resulting from the incident.
However, AIG has not yet provided a comment on the matter, leaving the details of their involvement unclear.
Fortunately, all 379 passengers on board the Japan Airlines Airbus A350 were able to escape the collision unharmed. However, tragically, five out of six crew members on the smaller aircraft involved in the collision were killed.
This highlights the devastating impact of the incident on the crew members and their families.
The Japan Airlines policy primarily covers damage to the hull of the aircraft.
This means that any physical damage to the structure of the airplane would be covered under this policy.
It is worth noting that large commercial insurance deals often involve multiple insurers, spreading the risk and responsibility among different companies. In this case, AIG was the primary insurer, but there may be other insurers involved as well.
Willis Towers Watson, a leading insurance broker, served as the main broker for this particular insurance deal, as confirmed by a second source. However, Japan Airlines Willis Towers Watson declined to comment on their involvement, leaving their role in the arrangement unclear.
Insurance brokers play a crucial role in connecting insurers with clients and negotiating the terms of insurance policies.
Last year, the aviation insurance market faced challenges due to conflicts in Ukraine and Israel-Gaza, as reported by insurance broker Gallagher. These conflicts likely increased the risks and uncertainties associated with insuring aircraft, leading to higher insurance rates.
In fact, aviation reinsurance rates increased by up to 25% during the reinsurance renewal date on January 1, 2024, according to Gallagher’s reinsurance unit.
This indicates the impact of geopolitical events on the insurance industry and the potential financial implications for insurers and policyholders alike.