It is now over a month since the disappearance of the Malaysia Airlines Flight MH370.
The plane was on a scheduled international passenger flight from Kuala Lumpur to Beijing that lost contact with air traffic control on 8th March 2014 barely less than an hour after takeoff.
According to media reports the aircraft, a Boeing 777-200ER, was carrying a total of 239 people comprising 12 Malaysian crew members and 227 passengers from 14 nations.
At the time of writing this article the plane was not yet found and more questions are now being raised on this mysterious disappearance of this plane.
With the plane still missing the whole world earnestly wait to see the unfolding of events as they watch minute to minute developments. Millions of dollars have so far been spent and will continue being spent with now the submersible Bluefin-21 being launched to search the sea floor hoping to find the wreckage according to media reports.
As I write this article my heart goes to the 239 families of those who were on board sadly with no survivors as advised by the Australian Prime Minister.
Being an insurer I always sniff around to see how the global insurance industry is responding to this tragedy. The heavy weights in the industry from the western world have since responded by paying huge funds which may be unbelievable to an ordinary Zambian like me.
In summing the payouts I will quote what the Telegraph online publication has reported on its website.
“Families of passengers on the Boeing 777 have received hardship payments and the airline has been paid for the plane.
Malaysia Airlines has already been handed $110 million (£67 million) by insurers over the loss of its missing Boeing 777 on flight MH370 that is the subject of an international search after disappearing more than two weeks ago.
Allianz Global Corporate & Specialty has paid the money into an escrow account and also agreed to make hardships payments to the families of the missing airliner’s passengers, to cover their costs while the hunt for the plane continues.
The payment was made in accordance with standard air travel industry policy which says that if a plane has been missing for more than two days then it is assumed it has been destroyed.
The policy was originally taken out in Malaysia but, as is common practice in the industry, it was reinsured with a group of large international financial groups lead by Allianz.
Depending on the outcome of the search and rescue operation for MH370, which is now thought to have crashed in the Indian Ocean more than 1,000 miles off the west coast of Australia, the insurers could pay out tens of millions of pounds more to the bereaved families of the 239 people on board. International rules stipulate a minimum payment per passenger of £105,000…”
This is a real benefit of insurance in times of such tragedy. In Zambian currency just the plane alone compensation amounts to about K660 million while to every passenger a minimum of about K1 million will be paid.
In aviation there are largely two forms insurance cover namely Marine Hull and Liabilities. The former relates to the aircraft itself while the later will cover legal liability to third parties or passengers’ etcetera.
With only two airlines operating namely Proflight Zambia and Mahogany plus a few other aircraft owners this type of insurance is not very popular in Zambia. However those who few who own aircrafts should seriously consider appropriate insurance policies to cover associated risks.
Comments: webster@picz.co.zm or webster_tj@hotmail.com or on face book search for Insurance Talk-Zambia page or call/text 0977 857 055 [The Author is a Chartered Insurer with ten years industry experience]
