Russian aviation market remains profitable despite Angara Airlines crash
Following the news that, on July 24, 2025, Angara Airlines Flight 2311, an Antonov An-24RV turboprop, crashed near Tynda in Amur Oblast in eastern Russia, resulting in the tragic loss of all 48 people on board – including 42 passengers and 6 crew, Chandini Sharma, Insurance Analyst at GlobalData, a leading data and analytics company, comments: 'This catastrophic accident will cost around $20 to $25 million to the Russian aviation insurance market. Claims paid by Russian insurers for the AZAL plane crash in December 2024, and this accident will not only reduce the profitability of the Russian aviation insurance market in 2025 but also increase the reinsurance rate for Russian insurers. It signals a growing pattern of severe and frequent losses that will reshape the risk environment for both the Russian and international aviation insurance and reinsurance markets, which are already reeling under pressure from the costly Air India plane crash in June 2025.
'The crash not only represents an immense human tragedy but also marks one of the largest single claims events in the recent Russian aviation insurance market. The total loss will comprise around $10 million of aviation hull and the rest as liability claims. Insurers will cover liability claims related to passenger fatalities, governed by Russian law and the internationally binding Montreal Convention. Initial estimation of liability claims, based on applicable regulations, could go up to $9 million. However, this could further escalate based on the investigation report.
'Russian insurers will bear a major portion of the loss, as aviation insurers retain most of the risk and cede less than 60% of the gross written premiums (GWP) to reinsurers during 2020-24. In 2024, insurers ceded 32.6% of the GWP to reinsurers.
'SOGAZ JSC, the leading Russian insurer, confirmed that it holds the civil liability policy for Angara Airlines. As the company ceded only 56.2% of the total aviation liability GWP, this incident will push the company's aviation business into losses. However, as aviation contributes only 0.6% of the company's general insurance GWP, this will not have a significant impact on its overall performance.
'This disaster comes amid ongoing turbulence in Russia's aviation insurance landscape, destabilized by elevated claims severity, inflation in repair costs, and disruptions linked to the Russia-Ukraine aircraft leasing dispute. However, the Russian aviation insurance market has been historically highly profitable, with the loss ratio remaining well below 30% in the last three years. The recent AZAL (based on earlier industry estimates of around $30 million) and Angara Airlines crash-related claims could go up to $50 million compared to the estimated aviation GWP of $298 million in 2025.
'With recent major aviation losses, insurance premiums and reinsurance rates are expected to increase. International reinsurers are expected to revisit their terms and conditions. Also, the ongoing investigations into the crash could result in regulatory action and trigger additional business interruption claims.'
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2 days ago
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Russian aviation market remains profitable despite Angara Airlines crash
The Angara Airlines crash in Russia may cost insurers $20–$25 million, raising premiums and straining the aviation reinsurance market in 2025. Following the news that, on July 24, 2025, Angara Airlines Flight 2311, an Antonov An-24RV turboprop, crashed near Tynda in Amur Oblast in eastern Russia, resulting in the tragic loss of all 48 people on board – including 42 passengers and 6 crew, Chandini Sharma, Insurance Analyst at GlobalData, a leading data and analytics company, comments: 'This catastrophic accident will cost around $20 to $25 million to the Russian aviation insurance market. Claims paid by Russian insurers for the AZAL plane crash in December 2024, and this accident will not only reduce the profitability of the Russian aviation insurance market in 2025 but also increase the reinsurance rate for Russian insurers. It signals a growing pattern of severe and frequent losses that will reshape the risk environment for both the Russian and international aviation insurance and reinsurance markets, which are already reeling under pressure from the costly Air India plane crash in June 2025. 'The crash not only represents an immense human tragedy but also marks one of the largest single claims events in the recent Russian aviation insurance market. The total loss will comprise around $10 million of aviation hull and the rest as liability claims. Insurers will cover liability claims related to passenger fatalities, governed by Russian law and the internationally binding Montreal Convention. Initial estimation of liability claims, based on applicable regulations, could go up to $9 million. However, this could further escalate based on the investigation report. 'Russian insurers will bear a major portion of the loss, as aviation insurers retain most of the risk and cede less than 60% of the gross written premiums (GWP) to reinsurers during 2020-24. In 2024, insurers ceded 32.6% of the GWP to reinsurers. 'SOGAZ JSC, the leading Russian insurer, confirmed that it holds the civil liability policy for Angara Airlines. As the company ceded only 56.2% of the total aviation liability GWP, this incident will push the company's aviation business into losses. However, as aviation contributes only 0.6% of the company's general insurance GWP, this will not have a significant impact on its overall performance. 'This disaster comes amid ongoing turbulence in Russia's aviation insurance landscape, destabilized by elevated claims severity, inflation in repair costs, and disruptions linked to the Russia-Ukraine aircraft leasing dispute. However, the Russian aviation insurance market has been historically highly profitable, with the loss ratio remaining well below 30% in the last three years. The recent AZAL (based on earlier industry estimates of around $30 million) and Angara Airlines crash-related claims could go up to $50 million compared to the estimated aviation GWP of $298 million in 2025. 'With recent major aviation losses, insurance premiums and reinsurance rates are expected to increase. International reinsurers are expected to revisit their terms and conditions. Also, the ongoing investigations into the crash could result in regulatory action and trigger additional business interruption claims.'
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