A consortium led by Reliance General Insurance Company on Wednesday bagged the mandate for providing insurance to Air India for $24.3 million. The cover will be provided for one year, starting September.
After Reliance General got the mandate to cover the state-owned airlines, New India Assurance has written to the chief vigilance officer questioning the securities placed by Reliance General.
The private sector consortium was led by Reliance General Insurance with HDFC Ergo, Bajaj Allianz and Iffco Tokio General Insurance Company as partners, whereas the public sector consortium was led by New India Assurance. ICICI Lombard General Insurance was the third bidder. New India Assurance came close with a bid of $24.9 million.
The cover size has gone up to $8.59 billion as against $6.39 billion in 2008-09. The state-owned airlines has paid $24.3 million premium to insure 134 aircraft. The public sector bidder has lost this mega cover after seven years. Last year, the airline had paid $19.5 million to insure 140 aircrafts.
New India Assurance had, in an earlier representation, said that the securities placed by Reliance did not fit the criteria.
Reliance will retain 10 per cent of the risk while it will place the rest 90 per cent in the international market.
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