Several aviation war insurance providers have issued notices to withdraw coverage for select airlines in Israel and Lebanon, amidst the ongoing war between Israel and Palestinian group Hamas.
Citing industry sources familiar with the matter, Reuters reported that some of these cancellation notices have already been implemented.
In times of major conflict, aviation war insurance companies based in European, American and the Lloyd’s of London markets have the authority to issue a seven-day notice of cancellation or alter the existing terms and conditions, the report noted.
A total of two airlines, whose names have not been disclosed by the sources, have been served with such notices by their insurers, two sources informed Reuters.
This move comes a few days after insurance providers for some of the Israeli airlines, including El Al Airlines, Israir and Arkia, confirmed their intent to issue cancellation notices.
The Reuters report quoted Hive Underwriters chief underwriting officer Bruce Carman as saying: “War underwriters’ appetite for continuing to cover these risks for no additional reward differs and some are now looking to withdraw cover, especially given the news the Israeli government has provided a backstop to cover flights.”
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The report said that representatives of El Al and Arkia have declined to respond to confirm the issuance of such notices, however, they said that the Israeli Government is providing them the needed coverage to continue operations.
Israir’s spokesperson confirmed that it has not received any such notice from its insurance provider, the report added.
Last week, the Israeli parliamentary finance committee also approved the move to provide Israeli airlines with a $6bn state guarantee to cover insurance against war risks.
“Certain underwriters have not allowed or not provided insurance for war risk and other allied perils insurance for some operators.
“These operators did not have operational experience flying into Israel and not under conditions where there is a conflict taking place,” Marsh global aviation leader Garrett Hanrahan told Reuters.