Sunday, 23 March 2014

Insurers pay out £67million over mystery Malaysia Airlines missing plane

  Disappeared: A Malaysia Airlines Boeing 777 like the one pictured went missing on March 8
Insurers have paid out £67million for the missing Malaysia Airlines jet despite the mystery still surrounding the fate of the Boeing 777 airliner. Hardship payments have also been made to families affected by the disappearance of flight MH370. 

Malaysia Airlines is covered by a local insurer, which passes on the vast bulk of the risk to Lloyd’s specialists and others in the London insurance market and further afield. 
AGCS, a specialist arm of German insurer Allianz, said last week it was making initial payments on the aircraft insurance policy.

The Mail on Sunday understands this consisted of a payout for the aircraft itself plus hardship payments to the families of the missing passengers. 
The plane has not even been confirmed as having crashed, however standard policies assume that any aircraft that has not landed or refuelled within 48 hours has been destroyed. 
Hardship payments are made to families who have to take time off work or face other costs as a result of relatives going missing.
If it emerges that some or all of the 239 people on board have died, there will be further payments for life insurance. 
International rules specify that airlines are liable for payments of just over £105,000 per passenger as a minimum – more if the airline is guilty of negligence. It is understood that liability for the claims will be shared by as many as 20 different insurers. 
Lloyd’s specialists are closely watching attempts to locate the jet. A consortium led by Lloyd’s insurer Atrium, which underwrote the terrorism risk on the policy, will have to hand over 20 per cent of the cost if it turns out to be an act of terrorism.

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