Aerospace insurers and reinsurers face a large claims bill from the worldwide grounding of Boeing Co.'s 737 Max aircraft, triggered by the March 10 crash of an Ethiopian Airlines flight.

Reinsurance broker Willis Re said in its report on April 1 reinsurance renewals that the grounding claim "could potentially be the largest ever non-war claim the market has incurred" and that it could "erode three to four years' worth of reinsurers' global excess of loss premium" in aerospace.

Aviation authorities around the world grounded the 737 Max because the Ethiopian Airlines crash was the second in less than five months to involve the aircraft, with a Lion Air flight in Indonesia having gone down in late October 2018. Boeing and the U.S. Federal Aviation Administration said April 1 that a fix to the 737 Max's flight control software would be ready only in "the coming weeks," despite the company having previously said it would be released in a matter of days.

Although the aerospace insurance and reinsurance market will face aircraft hull and passenger liability claims from the two crashes, the bulk of the overall exposure will come from grounding liability coverage, a component of an aircraft manufacturer's product liability coverage that pays out if a type of aircraft is grounded over safety concerns. According to various news reports, Boeing's product liability policy includes a $500 million sublimit for grounding liability, and according to The Insurance Insider, the upper limit on Boeing's product liability policy is $2.5 billion.

The size of the insurance claim is still unclear, with much depending on how long the 737 Max aircraft are grounded and whether Boeing is deemed to be liable. Flight tracking website Flightradar24 has identified 393 grounded planes belonging to dozens of airlines in over 30 countries.

But however large the claim, it will hit a market long marked by soft pricing conditions in which claims have exceeded premiums. Claims costs also rose year over year in 2018, according to broker Jardine Lloyd Thompson, and airline fatalities were the highest since 2014.

Crash investigators have yet to publish final reports on the causes of the two crashes, and Ethiopia's transport ministry April 1 countered a statement by the foreign ministry that it was preparing to publish initial findings. However, France's accident investigation authority said March 18 that the investigation team had noted "clear similarities" between the Ethiopian Airlines crash and the Lion Air crash, "which will be the subject of further study during the investigation."

The Ethiopian Accident Investigation Bureau had sent the flight data recorder and cockpit voice recorder from the crashed jet to BEA to extract the data. The BEA has now transferred the data back to its Ethiopian counterpart.

Boeing declined to provide specific details of its insurance policy. A Boeing spokesperson said in an emailed statement: "Our immediate focus is understanding the facts and taking next steps with the software update and related pilot training. We continue to assess any financial impact and it'd be premature to speculate on specifics."

Global Aerospace, a pool of companies in which Munich Re Co. has a 49.96% share, is reportedly the lead underwriter for both Boeing and Lion Air. Other members of the consortium include Berkshire Hathaway Inc.'s National Indemnity Co. (18.39% of pool security); Tokio Marine & Nichido Fire Insurance Co. Ltd. (12.37%); Mapfre SA's Mapfre Re (10%); and Mitsui Sumitomo Insurance Co. Ltd. (9.28%).