Missing plane insured losses may reach $600m

Missing plane insured losses may reach $600m

The vanishing Malaysian Airlines plane MH-370 may cost insurers $500m to $600m, Credit Suisse reported, as recent evidence suggests the plane may have been hijacked. 

The insurance loss for the aircraft hull is estimated to be $100m. Passenger liability claims for could reach $500m depending on the nationality and cause of the incident, said Credit Suisse. 

Therefore insured losses are predicted to hit between $500m and $600m.

Credit Suisse is the investment manager of CS IRIS Low Volatility Plus Fund which had no exposure to aviation risk.

The aeroplane went missing whilst flying from Kuala Lumpur to Beijing and a pilot spoke to air traffic control without any indication of trouble after the plane’s signalling system was disabled.

This suggests one or both pilots hijacked the plane or that they were forced to by someone else to divert the plane.

The search for the aircraft has included the Andaman Sea and Malacca Strait to the Gulf of Thailand and South China Sea.

“The Boeing 777-200 was carrying 12 crew members and 227 passengers from 14 nationalities. Two thirds of passengers were Chinese,” said Credit Suisse.

“While initial information hinted at a possible terrorist plot due to two passengers on board with stolen passports, this was not confirmed and the cause of the disappearance is still unknown, and will remain so until debris of the wreckage can be found and examined."

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