International Group Inc. was the lead insurer providing coverage for the Asiana Airlines Inc. jet that crashed while landing in San Francisco last weekend, according to two people familiar with the matter.
The coverage is split among several insurers and the lead broker was Willis Group Holdings Plc, said one of the people, who asked not to be identified because the contracts are private. Spokesmen at Willis and AIG declined to comment on coverage of the crash.
Asiana, South Korea’s second-largest airline, had $130 million of insurance for the plane and $2.25 billion for reparations, South Korea’s Financial Services Commission said July 7 in a statement. The commission estimated crash costs may be about 148 billion won ($128 million) for the plane and 50 billion won for payouts to passengers and damage to the runway.
The U.S. Transportation Safety Board is investigating the July 6 crash, in which two passengers were killed. There were 307 people on board the Boeing Co. 777, which caught fire after hitting a sea wall short of the runway.
Insurance Insider reported earlier that AIG was the lead insurer for the plane.
Prices have been flat or declining in the market for aerospace insurance, after several years without major losses, said Phil Smaje, who runs the aerospace division at London-based Willis. It’s too soon to say how the Asiana crash may affect the market for insurance, he said.
“We’ve gone through a period of very, very low frequency of loss and low severity of loss as well,” Smaje said. It’s a “very soft market environment.”
Nine insurers provided coverage to Asiana, the Financial Services Commission said. The companies reinsured most of the coverage to firms outside the nation, it said.
With assistance from Sangwon Yoon in Seoul. Editors: Dan Reichl, Steven Crabill