MH17 losses less than Katunayake Tiger attack

The costs of hull war risks emanating from Thursday's downed Malaysia Airlines flight MH17 are not expected to be above the US $380 million (£222 million) losses following the 2001 Tamil Tigers attack on the Bandaranaike International Airport, Katunayake, according to loss adjusting sources.

Hull losses alone from the Malaysia Airlines aircraft - which is believed to have been shot down over Eastern Ukraine with a surface to air missile - will total approximately US $101 million.

Lloyd's agency Atrium Underwriting is understood to be the lead insurer for war coverage on flight MH17 and a well-placed adjusting source claimed the hull war policy will be expected to pay out, compounding a difficult six months for the war risks market. They told Post: "The hull war losses in (the 2001 Tamil Tigers attack) were around US $380 million net and this MH17 event will not exceed that value. Liability and passenger costs will be from the liability policy and not from the hull war policy.

"However, the 2014 total for hull war losses may well exceed that 2001 figure. When in doubt, as with the MH370 incident (which went missing in March), the market will split the payment 50/50 across the hull and war policies.

"The war policy market has been sorely tested over the past six months considering the implications of MH370, this and also the losses from the rocket attack on Tripoli airport recently."

- Post Online