The UK government has moved towards a new airlines' war-risk insurance scheme by cutting state coverage for cargo carriers. Meanwhile, emergency insurance brought in after 11 September has been extended by two months.
The 11 September attacks led to aviation insurers withdrawing from the war-risk market, leaving operators with only $50 million cover. The UK government agreed to cover the rest of the risk up to $1 billion, but has now ordered cargo carriers to seek commercial cover for the first $150 million. Passenger carriers were given the same instructions on 28 May, and could also face a rise in premiums for their coverage.
However, the "Troika" scheme, which shares war risk between normal commercial insurers, a specially formed company, and the government, will continue until 29 August - it had been due to end on 30 June. The UK Treasury says it still intends "to withdraw from the aviation insurance market". This will probably take several years - the proposed Eurotime European insurance scheme, like US counterpart Equitime, resembles Troika, and will involve the state in insurance for three years, until a long-term solution can be found.
Source: Flight International
