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Global Risk Firms Assess MH370 Losses

Global Risk Firms Assess MH370 Losses In the wake of the tragic news that the Malaysia Airlines flight MH370 is lost, with all passengers presumed dead, aviation risk specialists now have the difficult task of dealing with the devastating loss to the airline and the families of the people on board.

Lloyd’s of London has begun assessing the scale of the tragedy. Lloyd’s has a tradition of paying claims promptly following tragedies, dating back to the 1906 San Francisco earthquake. Chairman John Nelson said "We have been insuring airplanes since they were first invented, this is what we do.''

After 18 days of uncertainty and speculation over the fate of the flight, reporters were told that debris which is consistent with plane wreckage had been spotted in the Indian Ocean. Efforts are now focused on finding the ‘black box’ which will tell authorities, and companies such as Lloyd’s and Allianz, two major global aviation specialists, a little more about what happened during the flight from Kuala Lumpur to Beijing.

Allianz has already begun making initial payments of an unspecified amount. Typically an aviation insurance policy will include $10million of cover per passenger with total coverage of between $2 and $2.5 billion.

For many, this story brings back memories of last time a plane full of passengers disappeared over the ocean. In 2009 an Air France plane crashed off the coast of Brazil and for 5 days no one knew where the Airbus A330 was. The crash site was eventually discovered, but it was two years before they found the ‘black box’ and were able to solve some of the mysteries surrounding the crash which killed all 228 aboard.

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Do you think you could deal with this situation sensitively and professionally? What skills do you think are important for the risk specialists in this case?

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