Will Malaysia Airlines flight have aviation insurance implications?

The effect on the insurance market from an individual event like the Malaysia Airlines tragedy at the Ukraine-Russia border this month is unclear.

Experts Advisen spoke to said risk is widely spread out in the hull and liability markets, making any significant impact unlikely. The value of the aircraft is about $97.3 million.

According to Advisen Loss Insight, there have been several aviation incidents over $100 million in losses since 2009, including an estimate $750 million loss from an Air France passenger jet crash on its way to Paris in June 2009, which killed 228 people. The total loss include hull and liability as well as litigation from wrongful death claims. AIG, AXA, Allianz and Swiss Re were tied to the loss in some way.

The mysterious disappearance of another Malaysia Airlines flight earlier this year. Allianz Global Corporate & Specialty was the reinsurer of the Malaysia Airlines Boeing 777, valued at $261.5m for the hull and liability policy.

Insurance rating agency A.M. Best Co. said the majority of the loss will be absorbed by the Lloyd’s market, as well as a number of global insurers and reinsurers, including Atrium Underwriting Group (hull war) and Allianz SE (lead hull and liability reinsurer).

“For a number of years, abundant capacity has placed considerable pressure on pricing, as well as terms and conditions, across all aviation lines,” said Catherine Thomas, director, analytics, in a statement. “At the beginning of 2014, rates were significantly below peak levels, and in spite of a number of large losses in recent years the market has remained profitable.”

“For the niche war risk market, losses this year will considerably outweigh premiums written and insurers are expected to react with substantial rate increases,” Thomas added.

A complex and lengthy settlement period is anticipated, said A.M. Best, adding that the Lloyd’s market is also likely to be affected by passenger liability claims.