Insurers Unlikely to Take Hit on Grounding of Boeing 737 Max 8 planes: Industry Officials
Insurance companies already get their premium in advance and liabilities are paid when there is some damage or accident during an operation, an official of a private sector non-life insurer said.
Jet Airways Boeing 737 Max 8. Image used for representation purpose. (Image: Jet Airways)
The grounding of Boeing 737 MAX 8 planes is unlikely to have any impact on domestic general insurers that have provided insurance to such aircraft, according to officials. As many as 12 B737 MAX 8 planes of budget carrier SpiceJet have been grounded amid safety concerns in the wake of a plane crash in Ethiopia on Sunday that killed 157 people. A top official of a public sector general insurance company said there would be no impact on insurers due to the grounding of the 737 MAX 8 planes.
Insurance companies already get their premium in advance and liabilities are paid when there is some damage or accident during an operation, an official of a private sector non-life insurer said. The probability of any claims are less when planes are grounded as a result of which there would be no financial implication, the official added.
Only SpiceJet and Jet Airways operate 737 MAX 8 aircraft in the country. However, crisis-hit Jet Airways has not been operating its five such planes due to non-payment of dues to lessors. On Tuesday, the Directorate General of Civil Aviation (DGCA) decided to ground 737 MAX 8 aircraft.
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