Insurance coverage for missing Air France plane led by AXAReprints
PARIS—A missing Air France flight that is presumed to have crashed in the Atlantic Ocean is covered under a policy led by Paris-based AXA Corporate Solutions, market sources said.
Air France Flight 447 went missing about four hours into its journey between Rio de Janeiro, Brazil, and Paris while the plane was somewhere over the Atlantic Ocean. There were 216 passengers and 12 crew members on board. Two Americans were among the passengers, according to Air France.
The Airbus 330-200 was valued at about $100 million, market sources said. The broker for the coverage is London-based JLT Aerospace, the sources said.
Officials for Paris-based Air France said the plane encountered stormy weather with strong turbulence and sent an automatic signal indicating a failure in electrical equipment about four hours after leaving Rio de Janeiro, before officials on the ground lost contact with the plane.
The plane was built in 2005, and its last maintenance check was April 16, according to Air France.
This would be the first crash involving an Airbus 330 in airline service since the planes began operation in 1994, and the first fatal accident for Air France since the July 2000 Concorde crash in Paris, according to Ascend Worldwide Ltd., a London-based aviation consultant that tracks global accident data.
The incident would be the fourth fatal accident on passenger planes in 2009, according to Ascend.
Brokers and other market observers said it was too soon to say how the incident would impact the aviation insurance market, which is firming this year for the first time in five years. About 12% of the total annual lead hull and liability policies renew in July, according to Aon's Aviation and Aerospace global practice group based in London.
“This is certainly going to have an impact on market sentiment over the coming months and serves as a reminder of the high potential risk that there can be in an airline,” said Magnus Allan, an aviation analyst at Aon. “Overall, the loss history of the last five years has been very impressive, but there is always a potential for this type of incident to occur.”
Paul Hayes, director at Ascend, said the Air France incident has the potential to influence underwriters, but it was too soon to be sure if it would.
“The market is a market, and each underwriter will make his own changes,” he said.
Air France, like most airlines, renews in December.