Aviation insurance is likely to emerge as a key growth area in the coming years with new airlines starting operations and existing players expanding fleet size, industry officials said.
Though the current market size of aviation insurance stands at around Rs 500 crore, growth of airlines industry will push the premium growth in the near future, they said.
"Aviation insurance is an emerging segment in the general insurance industry. We expect much growth coming from addition of new aviation players in the market and expansion of fleet by existing players," Manik Nehra, Senior Manager Aviation Insurance, Bajaj Allianz General Insurance, told PTI.
According to the general insurer, domestic aviation industry is growing at an average growth rate of around 15% per annum and is likely to add around 450 aircraft in the next five years.
Even the number of corporate jets are growing in domestic skies as more and more business houses are acquiring own aircraft for business travel needs, industry experts said.
"Currently, around 30 jets belonging to various corporates are insured by us. We are also the lead insurer of the recently launched regional carrier Air Costa. We aim to be a significant player in this segment," Nehra said.
He added the company is working with re-insurers like Allianz, which is one of the leaders in this segment, and GIC Re to provide re-insurance cover to aviation assets as it is a highly reinsurance driven business.
"Claims are not much from the aviation insurance segment. The portfolio is profitable," a public sector insurer said.
Country's largest insurer New India Assurance is a major player in this segment.
Meanwhile, Chief Executive Officer of Reliance General Insurance Rakesh Jain said the aviation insurance is largely reinsurance driven and a niche product.
"Currently, the segment contributes less than one% of the total industry. But, the pie is growing," Jain said.
Fleet expansion apart, among the new players Tata SIA Airlines is expected to be the first major companies to start operations next year.