Lufthansa Expects Insurance Claim of $300 Million--Update

By Ulrike Dauer And Natascha Divac 

FRANKFURT-- Deutsche Lufthansa AG expects an insurance claim of around $300 million in connection with the crash of its Germanwings aircraft in the French Alps, a spokesman for Germanwings' parent Lufthansa said Tuesday.

The $300 million includes expected claims from a passenger liability policy and from insuring physical damage to the aircraft, the spokesman said.

The bulk of the overall loss for which insurers will have to pay relates to the passenger liability policy that covers the 150 victims, and costs will depend on the nationality of the victim, among other things, insurance rating agency A.M. Best estimates. Those costs will be shared by a consortium of 10 insurers led by Allianz SE, which is backed by reinsurers.

There is more certainty around the ultimate cost of physical damage to the destroyed aircraft, which was valued at $6.5 million, A.M. Best says.

If it is determined that the co-pilot deliberately crashed the aircraft, the insurers that underwrote the airline's "hull war" insurance policy will likely become liable for the aircraft loss, rather than the consortium that underwrote the aviation all-risks policy, says Catherine Thomas, director of analytics at A.M. Best.

In that case, the Lloyd's market, rather than the consortium led by Allianz, will absorb the bulk of the aircraft loss, according to A.M. Best.

Allianz and Lloyd's declined to comment.

Lufthansa earlier said it would pay out an initial sum of EUR50,000 ($54,000) a person to the relatives of passengers on the Germanwings plane that crashed in the French Alps last week.

Aviation lawyers say that Lufthansa and its insurers will likely face large legal liability claims in the crash despite findings that the co-pilot, who is suspected of deliberately crashing the plane, hid medical problems from his employer.

Write to Ulrike Dauer at [e-mail] and Natascha Divac at [e-mail]

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