Airlines face doubling in war insurance premiums after Sudan losses-sources

Airlines could end up paying twice as much for insurance they need to protect themselves against losses triggered by war after a bruising year wiped out aviation war insurers’ revenue for 2023, industry sources say. Aircraft were destroyed at Khartoum airport in a conflict between military factions in Sudan that erupted earlier this year, resulting in losses of between $240 and $300m, according to three aviation insurance sources. The losses incurred in Sudan represented the total global annual premium in the niche aviation war insurance market, two of the sources said. Insurers are as a result weighing a potential doubling of the premiums on such policies when airlines typically renew cover in the fourth quarter, the sources said. The sources declined to be named due to client confidentiality. Insurers are already feeling the pinch as they face legal action for up to $10b in claims from around 400 aircraft stuck in Russia after sanctions on the country following its invasion of Ukraine last year. Some have since cut back on aviation war coverage to minimise future losses amid the conflict. The exposure to losses from Ukraine and Sudan has fed through to the reinsurance market. Reinsurers insure the insurers, who typically pass on any extra payments for reinsurance to their customers. Some types of aviation war reinsurance saw rates rise by up to 100% at the key July 1 renewal date, according to a report this month by broker Gallagher Re.<br/>