India’s most severe aviation disaster in over ten years, involving the crash of an Air India Boeing 787 on June 13, 2025 in Ahmedabad, is expected to result in insurance claims totaling approximately $475mn.
The incident, which claimed the lives of 241 people and others on the ground, is likely to trigger one of the largest aviation-related payouts in Indian history.
General Insurance Corporation of India, one of the insurers of Air India, estimates the aircraft hull and engine claim at $125mn (see Deadliest Aircraft Crashes).
Additional liability claims for loss of life are projected to reach $350mn. Combined, these figures represent more than three times the total aviation insurance premium volume generated in India in 2023.
The expected payouts will significantly affect the global aviation insurance and reinsurance markets.
Indian insurers anticipate that premiums for aviation coverage will increase across the sector, either immediately or at the time of policy renewal.
Insurers also noted that claims related to foreign nationals killed in the crash will be subject to legal frameworks in their respective countries, potentially pushing total liabilities even higher.
Insurers are expected to settle the hull claims first, followed by the more complex liability settlements.
According to Narayanan, the process for liability compensation will take longer to conclude. Despite the scale of the incident, the domestic market exposure remains limited, as aviation contributed only around 1% to the total premium income for the involved insurers.
Furthermore, domestic insurers have ceded over 95% of their direct written aviation premiums to global reinsurers, reducing the local financial burden.
As a result of this event, insurance policy sellers in India expect a sharp increase in airline insurance costs, with premium spikes potentially reaching up to 30%.
This claim is poised to become a benchmark loss event in Indian aviation insurance, with long-term pricing and reinsurance implications.
Air India Flight 171 was a scheduled international passenger flight operated by Air India from Ahmedabad Airport in India to London Gatwick Airport in the United Kingdom.
At 13:39 IST on 12 June 2025, the Boeing 787-8 Dreamliner operating the flight crashed approximately thirty seconds after takeoff into the hostel block of B. J. Medical College in Meghani Nagar neighbourhood of Ahmedabad.
Seconds after takeoff, the aircraft began losing altitude while maintaining a roughly wings-level and nose-up orientation. The flight crew issued a mayday call reporting loss of power and thrust. The crash caused multiple explosions and thick plumes of smoke.
The aircraft was carrying 230 passengers and 12 crew members. Of these, only one passenger survived. The crash also killed 34 people and injured at least 60 more on the ground.
This was the first fatal accident and hull loss of the 787 Dreamliner, which entered commercial service in 2011.
