American Crash Loss Assessed
The total insured monetary loss in the crash of American Airlines flight 587 will be above a low estimate of $150 million but “conceivably less than $750 million,” according to Bob Bailey, chairman and chief executive officer of NYMAGIC Inc., one of the airline's insurers.
The Nov. 12 flight from Kennedy Airport in New York was bound for the Dominican Republic. Five persons on the ground and 260 persons aboard the Airbus A300 perished when, minutes after takeoff, the plane crashed into a neighborhood in Queens, N.Y.
Mr. Bailey heads the holding company that contains New York Marine & General Insurance Company, one of a dozen insurers for the airline. The lead insurer was Associated Aviation Underwriters of Short Hills, N.J., part of London-based Global Aerospace Underwriting Managers.
“We dont know the [total] liability. Its guesswork at this time,” he said, adding that information concerning the percentage of coverage his firm has is proprietary.
The other insurers providing American with hull and liability coverage through Aon Group Ltd. are: subscribing Lloyd's underwriters and members of the Institute of London Underwriters, along with subscribing insurance carriers including United States Aviation Underwriters Inc., La Concorde Assurances, Assurance France Aviation, AXA Global Risks U.K., Avion Assurance Ltd., American Home Assurance Company and Legion Insurance Company.
Peter Butler, underwriting executive for Global Aerospace, said he had held off new quotations for “an hour and a half” after the crash to establish whether terrorism was involved. Underwriting began again the next day, he said. If terrorism had been involved, “there could have been a different reaction,” he noted, explaining that the “pause” on Monday was not a halt in underwriting.
Wayne Wignes, president of Americans broker, Aon Aviation in Chicago, said that since Sept. 11 dramatic premium price increases for airlines have been underway and “increases of 200 to 400 percent are not uncommon.”
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, November 19, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
