Newstrack

Nacil flys high when it comes to fleet insurance

Sanjay Jog - Mumbai

National Aviation Company of India (Nacil), a company formed after the merger of Air India (AI) and Indian (IA), ranks 10th in the Asian region in terms of average fleet value (AFV) insured in the London reinsurance market, according to figures released by insurance broker firm Aon Global. The company, Nacil, on the threshold of a massive expansion plan, will witness the induction of nearly 100 new Airbus and Boeing aircraft in its fleet in the period commencing from October 1.

At present the combined entity has a fleet size of 110 aircraft. In terms of passenger numbers Nacil ranks 10th in the region and as far as departures are concerned the company ranks 7th. Nacil sources confirmed this development.

The combined fleet of Nacil, which represents the erstwhile Air India and Indian, was placed in the market by The New India Assurance Co with the assistance of Aon Global Insurance Services. The company was able to obtain a substantial saving up to 40 per cent vis-à-vis the premium as compared with premiums prevailing in 2006-07. The exposure on AFV is likely to go up by nearly 25-30 per cent at the expiry of the current year policy.

Nacil had awarded the mandate to the New India Assurance as a lead insurer and ICICI Lombard as co-insurer with total exposure value of US$ 6 billion for the year 2007-08. AI had earlier renewed its insurance policy effective from July 1 with a discount of 40 per cent over the rates achieved last year. On account of its merger, IA could also stand to benefit by the discount.

The benefit is likely to be in the tune of US$ 5 million in view of the 40 per cent discount in rate offered by New India Assurance. IA's insurance fleet revival is due on October 1. AI's exposure was US$ 2.8 billion while IA had an exposure of US$ 1.5 billion in 2006-07. New India has appointed Aon as broker.