Aviation insurers against war risks have issued a notice to cancel insurance coverage for some Israel- and Lebanon-based airlines due to the conflict in the region, with some cancellations already taking effect, three sources familiar with the matter said.
Aviation war risk insurers based in Europe, the United States and London's Lloyd's Market can issue 7-day notice of cancellation or other changes to the terms and conditions in the event of a major conflict that they feel will significantly increase insurance risk in the long term.
Insurance companies covering El Al, Israel and Arkia have previously said they can issue such notices because of the war between Israel and the Palestinian resistance led by the Qassam Brigades (Hamas's military wing).
Two sources told Reuters Israeli airlines had received notifications, without specifying specific carriers.
Bruce Karman, chief insurance officer at Hive Insurance, said: "War risk insurers are willing to continue covering these risks without imposing additional costs, and some are now looking to withdraw coverage, especially in light of news that Tel Aviv has provided support for flight coverage."
Israel's parliamentary finance committee last week approved a plan to provide a $6 billion government guarantee to cover war risk insurance for Israeli airlines.
An Israel spokesman said the insurers doing business with the company had not given them notice, but did not provide further details. A spokesman for Lebanon's Middle East Airlines did not respond to requests for comment.
Israeli airlines continued their flights while most foreign airlines canceled flights to Tel Aviv as flights to carry passengers abroad and those called up to serve increased from reservists.
Airlines usually offer two types of insurance, an "All Risk" policy that covers routine damage related to the fuselage and passenger obligation, and a "war" policy to cover losses to the aircraft as a result of a war or terrorist act.
Contraction
Two days ago, the newspaper "Globes", which specializes in the Israeli economy, quoted the Israeli company El Al warning that the aviation industry is facing a contraction.
El Al President Donia Ben Tal Janancia said that because of the war, El Al would operate fewer flights in the fourth quarter of this year. If the special security situation in the country lasts longer, there will be a negative impact on the company's results next year as well.
At dawn on the seventh of this month, the Palestinian resistance, led by the Qassam Brigades, launched Operation "Al-Aqsa Flood", in response to the continuous attacks by the Israeli occupation forces and settlers against Al-Aqsa Mosque, the Palestinian people and their property.
On the other hand, the occupation army launched Operation Iron Swords, and continues to launch intensive raids for the 13th consecutive day on many areas in the Gaza Strip, killing more than 3500,<> martyrs, most of them children and women.