War-risk insurance market caught out
Claims for incidents in past five months total an estimated US$600 million
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[KUALA LUMPUR] Malaysia Airlines' (MAS) two crashes in less than five months are sending tremors through the aviation insurance market - not least because the carrier's US$2.25 billion overall liability policy is mysteriously missing a standard clause that usually limits insurers' payments for search-and-rescue costs.
The looming payments are coming as underwriters face other claims, because of the shelling of Libya's main airport a week ago, with 20 planes damaged, and a pair of deadly Taleban attacks on Karachi's airport in Pakistan.
For just one category of aviation insurance - war-risk insurance on the planes - claims for incidents in the past five months total an estimated US$600 million for a sector that collects US$65 million a year in premiums.
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