Iceland Volcano Send Business to Bermuda?
[Written by Larry Burchall] Could Iceland’s exploding volcano send reinsurance business to Bermuda?
As reported in today’s “The Scotsman”, Chris Yates, an aviation security analyst with Jane’s Information Group, said it was essential to protect the safety of airline passengers.
“I can understand the anxiety of the airline industry, given that they are collectively losing about £200 million ($310 million) a day, but what price can you put on safety?”
If airlines that transit or that fly in European airspace start flying before the Icelandic volcanic ash cloud has dissipated completely, are airline executives likely to seek additional insurance cover against what may be seen as increased flight risks in that European airspace?
Yates went on to say that the key problem was the lack of understanding of what constituted a “safe” concentration of ash, due to a lack of previous research, and urged that this should be remedied.
That research will take time. But airlines are pressing hard to be allowed to fly though airspace that they consider to be safe, and in the absence of sound research, new special risk insurance may be part of the interim solution. With a range of potentially huge new risks most of which were previously uninsured, the insurance world may be entering a new phase in aviation insurance.
Some of this unusual spin-off from an exploding volcano in far-off Iceland may reach Bermuda’s reinsurance market.
