By Michael Jones

July 10 - (The Insurer) - Airline crashes and oil refinery fires affecting the downstream market have made up the bulk of man-made losses shouldered by the insurance industry in the first half of 2025.

• Airline losses likely exceed $2 billion, American Airlines incident largest contributor

• Downstream energy market sees $1.5 billion in losses in Q1 2025, surpassing 2024 full year total

• Marine market avoids major losses, with notable incidents in North Sea and Red Sea

Before February had concluded, multiple senior aviation market sources indicated to this publication that losses in the airline market had already exceeded $1.6 billion following several crashes.

The most significant of these in insured losses was the American Airlines crash.

Aviation market sources said that insured loss expectations for this incident started at around $900 million and increased to approximately $1 billion. However, Gallagher said in its second quarter Plane Talking report that there were rumours of negotiations with the U.S. government to reach a settlement over the incident.

"A positive outcome with the U.S. government paying a portion of the liability claims would reduce the aviation insurance market’s expected payout, but it remains to be seen to what extent this would affect individual insurer reserves and the overall year-end market position on a premium versus claims basis", Gallagher said.

The aviation market's hopes for a quieter rest of the year were dashed on June 12 when a London-bound Air India jet crashed minutes after taking off from Indian city Ahmedabad, killing at least 270 people.

Insured loss expectations from this incident have been varied. GIC Re chairman and managing director Ramaswamy Narayanan told Bloomberg that insured losses could total $475 million, while two aviation broking sources said losses could reach as much as $500 million. On July 7, Gallagher said loss estimates were in the "low hundreds of millions".

If losses from the Air India disaster do reach top-end estimates, this would bring H1 airline market losses above $2 billion.

These losses add to overall aviation market losses, the bulk of which are associated with lessor claims related to Russia's invasion of Ukraine.

On June 11, 2025, London's High Court ruled that aviation war insurers were liable for recoveries from claimants in association with these claims. Court documents showed the insured value of aircraft in the case amounted to more than $4.5 billion, with settlements thought to have reduced this amount to nearer $3 billion.

Energy market

The energy market, particuarly downstream, also contibruted to significant insured losses in the first half of the year.

This kicked off in January with the $500 million loss from the fire at Vistra Corp's Moss Landing facility, which was initally placed into the power market.

The downstream market followed suit with Willis stating that the first quarter of 2025 saw $1.5 billion of potential losses, more than in the entirety of 2024.

Losses included the fire at Zaro Energy's Bayernoil refinery in Bavaria, which two senior marine and energy marke sources said in February had provisional loss estimates of around $600 million.

It also included a claim in relation to a February 1 fire at PBF Energy's Martinez oil refiner in California. Initial insured loss estimates streteched into the hundreds of millions of dollars, two senior market sources said.

H1 downstream energy losses were rounded off in late June by a fire at the Marathon Petroleum Galveston Bay Refinery in Texas City, Texas. Sources have said this is set to trigger a large business interruption claim for the market.

Marine

The marine market largely avoided catastrophic losses in the first half of 2025, with the Red Sea staying largely quiet until July.

Notable incidents included March's North Sea shipping crash, which DBRS Morningstar estimated would cause insured losses between $100 million and $300 million.

The Midas Morning sinking in June added to insured losses, with some source estimates of the cargo loss alone above $100 million. However, two senior marine market sources said the cargo cover was placed in the Chinese market with no notifications hitting the treaty market, so more definitive loss estimates were harder to make.