Starr leads all-risk cover for crashed American Airlines jet

By Michael Jones

Jan 30 - (The Insurer) - Starr Insurance leads the airline all-risks cover for the American Airlines jet that collided with a military Black Hawk helicopter and crashed into the Potomac River near Reagan Washington National Airport on Wednesday, The Insurer can reveal.

Sources said the cover was brokered by WTW. It is understood the placement is also led out of London on a warranty basis. The insured value of the crashed passenger jet is unclear. Sources have offered estimates for the insured hull value of between $15mn and $25mn.

However, sources said this would be dwarfed by what looks likely to be a significant liability loss. One source said the liability component will likely be in the hundreds of millions of dollars.

The mid-air collision occurred as the passenger jet was on approach to land at Reagan airport. Reuters reported that radio communication showed the helicopter crew were aware that the plane was in the vicinity.

American Airlines confirmed that 60 passengers and four crew members were onboard the jet.

CBS News has reported that at least 18 bodies have been recovered from the river, citing a police official, while NBC reported that four people had been pulled alive from the water.

Police said multiple agencies are involved in the search and rescue operation.

One major concern for any survivors and first responders is hypothermia. AccuWeather said that water temperatures ranged from 0.6°C to 2.2°C near the crash site.

The Pentagon said it was launching an immediate investigation into the incident, which President Donald Trump appeared to blame on the helicopter crew and air traffic controllers in a post on Truth Social.

The last major deadly crash involving a commercial airliner in the US was in 2009, when all 49 people aboard a Colgan Air flight were killed when it crashed in New York state.

One source said that this event would very likely have an effect on aviation reinsurance pricing. Aviation broking sources added that the loss could push the airline all-risks market close to a point where recent market softening is stemmed.

The crash comes a month after South Korea suffered its worst-ever air disaster when a Jeju Airlines-operated Boeing 737-800 crash landed at Muan International Airport.

All 175 passengers and four crew were killed in the incident, while two crew members were pulled out alive. Axa XL is the lead reinsurer on the airlines all-risks cover for Jeju Air.

Earlier this month, this publication reported that preliminary market loss estimates for the crash had coalesced around $200mn to $250mn, although all-risk lead Axa XL was yet to set an official reserving figure.

Earlier this week The Insurer revealed that Starr also leads the ~$38mn all-risks cover for the Air Busan plane that caught fire at Gimhae International Airport on Tuesday.

Late last month, this publication first reported that Starr was the lead for the American Airlines all-risk cover.

WTW, Starr Insurance and American Airlines were approached for comment.