Allianz, the Munich-based multinational insurance firm, could face a nearly $100 million payout to cover losses stemming from the missing AirAsia Flight QZ8501, which disappeared over the Java Sea on Sunday with 162 people on board, Reuters reported Monday. The company was also the lead reinsurer to Malaysia Airlines' Flight MH370, which has been missing since March, and Flight MH17, which was shot down over Ukraine in July.
“We can confirm that Allianz Global Corporate & Specialty UK (AGCS) is the lead reinsurer for AirAsia, for aviation hull and liability insurance,” an Allianz spokesperson reportedly said. “We stand by to support our client as fully and quickly as possible, working in conjunction with the insurance broker and our co-reinsurers.”
Although the company refused to comment on the minimum amount needed to cover the expected insurance bill, Reuters calculated that the minimum payout could be as high as $100 million, with over $27 million in initial payouts to relatives of the 162 people on board the Airbus A320-200.
However, after investigations, if the airline is found to be at fault, the insurer’s liability could be much higher under the Montreal Convention adopted by the member states of the International Civil Aviation Organization.
“This is going be identical to MH370 and MH17 in the sense there are standard minimum insurance obligations which all carriers have to have, but if negligence can be demonstrated the sky's the limit in terms of claims,” John Ribbands, a Melbourne-based expert in aviation insurance, told Reuters.