The costs of hull war risks emanating from yesterday’s downed Malaysia Airlines flight MH17 are not expected to exceed the $380m (£222m) losses following the 2001 Tamil Tigers attack on Sri Lanka’s Bandaranaike Airport, according to loss adjusting sources.

Post understands the hull losses alone from the Malaysia Airlines aircraft - which is believed to have been shot down over Eastern Ukraine with a surface to air missile - will total approximately $101m.

Lloyd’s agency Atrium Underwriting is understood to be the lead insurer for war coverage on flight MH17 and a well-placed adjusting source claimed the hull war policy will be expected to pay out, compounding a difficult six months for the war risks market.

They told Post: “The hull war losses in [the 2001 Tamil Tigers attack] were around $380m net and this MH17 event will not exceed that value. Liability and passenger costs will be from the liability policy and not from the hull war policy.

“However, the 2014 total for hull war losses may well exceed that 2001 figure. When in doubt, as with the MH370 incident [which went missing in March], the market will split the payment 50/50 across the hull and war policies.

“The war policy market has been sorely tested over the past six months considering the implications of MH370, this and also the losses from the rocket attack on Tripoli airport recently.”

All 298 people on board flight MH17 were killed, including nine Britons, and Willis has confirmed it is working with the embattled carrier following the incident.

A Willis spokeswoman said: “Malaysia Airlines is our client and we are working closely with them at this difficult time.”

Allianz Global Corporate and Specialty is the lead hull and liability reinsurer on flight MH17.

– Post Online