Reliance General Insurance-led consortium bags the mandate for $24.3 million.
The National Aviation Company of India (Nacil) has managed to avoid any adverse impact of the Air France crash on its insurance cost as it has renewed its annual cover without a significant rise in premium.
This was despite the cover size rising 34 per cent to $8.59 billion as against $6.39 billion in 2008-09. The one-year policy will be effective from September.
The contract has been bagged by Reliance General Insurance along with HDFC Ergo, Bajaj Allianz and Iffco Tokio General Insurance Company. The state-owned airline will pay $24.3 million for 134 aircraft.
The public sector consortium, led by New India Assurance, came close with a bid of $24.9 million. New India Assurance had provided the cover to the national carrier in 2008. The other bidder was ICICI Lombard General Insurance.
“The rate has actually fallen from last year as the hull value has gone up by around 34 per cent as against no rise in premium,” said a senior executive of one of the four insurance companies that had insured the airline.
Nacil had deferred the renewal of the policy after its expiry on June 30 as it could extend the policy for three months at existing rates under a clause in the previous policy.
People familiar with the development said the new management was keen on more competition.
Two private airlines, Kingfisher and Indigo, had to buy insurance cover at the expiry as there was no extension clause in their policies.
On renewal, Kingfisher’s premium had shot up by 40 per cent. The largest private sector insurance company, ICICI Lombard, has provided $3.09-billion cover to Kingfisher Airlines effective from June 24.
Indigo has bought insurance cover from New India Assurance at a cost that is 10 per cent more than its previous cover. However, Jet Airways did not have to pay a higher premium as it renewed its cover at the beginning of the current financial year.
