Cholamandalam to provide non-aviation cover to Air India

New Delhi: Private sector insurance company Cholamandalam MS General Insurance will provide non-aviation related insurance cover to Air India for 2007-08.

According to Air India officials, the airline has negotiated a 25 per cent reduction in the insurance pay out, even as there has been an increase in the cover being provided, which is expected to be in the region of Rs1,800 crore. However, no firm financial details were made available.

Non-aviation related insurance relates to cover given to building, machinery, equipment and vehicles among other items.

With 12 insurers, both private and public sector, in the fray for the non-aviation contract, India's State owned carrier now expects to see fierce competition between the public and private sector insurance companies for its aviation-related business as well.

Air India hopes to take a decision for the aviation end of the business by the end of March.