Insurers could face up to $350 million in claims from Tuesday’s Air France Concorde crash that claimed the lives of all 109 passengers and crew aboard. European companies are expected to foot most of the bill.
Compensation for families of victims of the crash, which also killed four people on the ground, is expected to account for most of the cost. The plane was reportedly insured for about $30 million.
Stewart Wilson, chief operating officer for Heath Lambert in London, told the Insurance Journal that Lloyd’s covers at least a portion of the aircraft’s reinsurance. “But the direct insurance of Air France is done in the French market,” Wilson said. “Heath handles a portion of the reinsurance, so a small portion of the risk is based directly at Lloyd’s.”
Early estimates suggest the total insurance costs will likely be less than half that for the SwissAir crash off the coast of Canada in September 1998, which is thought to have cost insurers $750 million. That crash killed all 229 passengers on board as reported by Reuters news service.
“Based on recent precedents, compensation payments to passengers’ families are running at about $2.4 million per passenger, which suggests the total cost to insurers could be between $250 million to $350 million,” Robert Hartwig, chief economist of the New York-based Insurance Information Institute, was quoted as saying by Reuters. His calculation is based on compensation paid to families of victims of the ValuJet crash in Florida in 1996, which killed 110.
He told Reuters, however, that confidential compensation settlements are hard to track accurately. With 109 people on board the Concorde, compensation alone could account for claims of about $260 million, based on Hartwig’s estimates. An insurance consortium called Reunion Aerienne has said it insured the Air France Concorde. The consortium is made up of British insurer CGNU, Abeille, Italy’s Generali France and French mutual insurers Groupama-GAN and Mutuelles du Mans Assurance. No U.S. insurers appear to be liable for major claims.
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