Page 45 - The Insurance Times August 2022

General Aviation claims in 2008 exceeded Rs. 500 million and started 2009 on a bad note with claims in first five months
exceeding Rs. 350 million. As against this, past 10 years average general aviation losses are hovering around Rs. 400
million. When we compare these claim figures against the total general aviation premium in India, one may come to a
conclusion from the insurer's perspective that general aviation is profitable over the last 10 years period. This may not be
true for all insurers, especially considering the fact that 10 years average loss figure consists of two or three major losses
in each year.

Claims figure of three biggest aviation insurer in India for the last 2 years

Claims Incurred (in Rs. '000)
BAGIC HDFC ERGO NEW INDIA
FY20 FY21 Change FY20 FY21 Change FY20 FY21 Change
(%) (%) (%)
Claims Paid Direct 155704 222513 42.9 132705 51289 -61.4 1022400 2600473 154.3
Reinsurance ceded 93454 99653 6.6 126177 51193 -59.4 693139 2059193 197.1
Net Claims Paid 62250 122860 97.4 34313 15864 -53.8 335166 553163 65.0
Change in Claims outstanding 90940 68768 -24.4 88080 86863 -1.4 121029 272217 124.9
Total Claims 153190 191628 25.1 24052 14647 -39.1 456195 280945 -38.4

Reinsurance claims- GIC Re and Munich Re Claims schedule

Claims Incurred (Rs. '000)
GIC Re Munich Re
FY20 FY21 change % FY20 FY21 Change %
Reinsurance Accepted 10218839 9628835 -5.8 20439 53564 162.1
Net Claims Paid 8158622 7580103 -7.1 10232 27132 165.2
Total Claims Incurred 7872111 12016301 52.6 13007 56254 332.5

Conclusion
With excessive insurance market capacity and increased level of competition the gap between General Aviation premiums
and claims is narrowing very fast and it remains to be seen which direction the market will move in the near future. The
Airline market worldwide is witnessing rate hardening and airline buyers in India are expected to follow the international
trend and treatment of their peers globally.

The unbridled growth in the aviation sector has come as a bonanza for the insurance sector. Thanks to capacity addition
and the entry of new aviation players, a host of insurance companies are eyeing this growing market to offer insurance
cover to new planes that are being brought to India.

India is expected to become 3rd largest civil aviation market by 2025. The insurers and reinsurers need to improve their
strategies and diversity of products offerings.

Though India's contribution to the total global insurance premium paid by airlines which stands at US $5.86 billion is
miniscule, the growth in aviation premium pay-out is highest in China followed by India.The aviation sector is enlarging its
scope and scalability and therefore, the entry of more numbers of insurers is a must to balance the growing market.

Reference
Various Sources

The Insurance Times, August 2022 45