5 percent to 2.5 percent of the aircraft value. The law of large numbers does not apply to this segment as each aircraft is of high value. An Airbus or Boeing would cost anything from Rs.200 crore to Rs.1,000 crore. Even minor damage - technically called attrition loss - would amount to Rs.100 crore,' T.A. Ramalingam, head of underwriting at Bajaj Allianz General Insurance Company, told IANS.

According to Dasgupta, during 2008-09 Indian non-life insurers booked a premium of Rs.343 crore under the aviation portfolio, up from Rs.304 crore booked the previous year.

'About Rs.200 crore (previous year about Rs 175 crore) pertains to aircraft while the balance pertains to general aviation. Our market share last fiscal was 16 percent with a premium income of Rs.55 crore as against 14 percent and Rs.41 crore in 2007-08.'

Market leader New India earned a premium of around Rs.110 crore under this portfolio in FY08. If one takes into account the inward reinsurance premium, the company's market share will be more than 50 percent, a company official said.

Meanwhile, the aviation insurance segment in India is set to boom with around 450 aircraft valued around Rs.49,200 crore to be added to existing fleet over the next five years, he added.

'With various airlines going for major expansion and new airlines starting operations, the aviation sector is growing at 15 percent per year and the growth is faster than any other country,' the official said, speaking on condition of anonymity.

It is this potential that is attracting United India to focus in a major way on this segment. Another official said that the company has set up a core group to get a firm foothold in this segment.

(Venkatachari Jagannathan can be contacted at v.jagannathan@ians.in)