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Feature: Pricing after an aircraft accident
26 July 2010
Airline accidents are not the only factor that impact airline insurance costs, writes JoAnn DeLuna.
Read more:
Airline crashes
airline accidents
airline insurance
International Air Transport Association (Iata)
Ascend
AON
When an airline has a crash, it does not only affect its own insurance price, but also it could affect prices for the entire industry. Lead hull and liability prices rose by 124% after the terrorist attacks on the US on September 11 2001.
“You had every aviation policy in the world cancelled because underwriters wanted to change the conditions on the policy, and the only mechanism they had to do that was cancelling the policies and re-issuing them," says Paul Hayes, a safety director, Ascend.
That is an extreme case. However, the Air France commercial flight 447 from Rio de Janeiro to Paris in June 2009, also made insurance prices rise quickly. The reasons for these price hikes depend on a number of factors.
An airline's accident history plays a role, but brokers and loss adjusters say costs can vary significantly based on an insurer's perception of risk, which...
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