According to Asia Insurance Review, Malaysia Airlines (MAS) has already been handed US$110 million by insurers over the loss of its missing Boeing 777 on Flight MH370 which Malaysian Prime Minister Najib Razak announced “ended” its journey in the southern Indian Ocean.
Before Mr Najib’s announcement, The Telegraph, a UK newspaper, had reported that the US$110-million payout was made in accordance with standard air travel industry policy which says that if a plane has been missing for more than two days, then it is assumed it has been destroyed.
The policy was originally taken out in Malaysia but, as is common practice in the industry, it was reinsured with a group led by Germany’s Allianz. The other reinsurers include GIC Re, Hannover Re, Lonpac Insurance, Malaysian Re and Eurasia.
The primary insurance cover for the aircraft is written 100 percent by Etiqa Insurance & Takaful, a domestic Malaysian carrier with the majority of the risk ceded to the global panel of reinsurers, reported Inside FAC, a publication which provides news of the global facultative markets. Sources said that Etiqa retained only around 4.5 percent of the risk.
In early April, Standard & Poor’s Ratings Services has estimated, based on information from public and market sources, that losses arising from the disappearance of Malaysia Airlines’ (MAS) Flight MH370 would be US$250 million-US$450 million, depending on potential court settlements.
“The bulk of the insured loss will be driven by liability loss payouts to family members of the passengers. The amount paid for each passenger could vary widely based on the jurisdiction in which the claim is filed and the nationality of the passenger, among other factors.”
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