Aviation lines veer to better terms for insureds despite volatility
Aviation lines are veering towards improved terms for insureds, despite the Q1 impact of Russian appropriation of leased aircraft adding a heavy dose of volatility and higher rates for select liability, war risk and terrorism lines.
“Across all aviation segments, market conditions are improving, leading to a more favourable environment for insureds in 2022,” a Q4 market report by Brown & Brown claimed. “Immediate focus from US markets is on capturing single-digit rate renewal rate increases.
“It is strongly anticipated that the fourth quarter of 2022 will remain favourable and consistent for insureds as competition for favourable business grows.”
Russian appropriation of leased aircraft likely rendered more than $5 billion in leased airline hull claims out of the $13 billion in valued assets confiscated, authors claimed. That fiasco was said to add a quick 50% to 100% to rates on contingent liability, war risk and terrorism premiums.
“The impact of the nationalized aircraft on the ground in Russia remains uncertain, as the outcome may support continued rate lift and a re-hardening of the market into 2023,” authors wrote.
New challenges for the aviation industry are said to include the standard set of macro-economic pressures affecting most markets, including lack of staff, inflation and rising interest rates, with the kick-on impact on reinsurance rates.
Areas of remediation for insurers include maintenance, repair and operation (MRO) facilities, airlines, ground handlers, rotor wing and international operators.
“While flat to modest increases are still consistent on most aviation renewals, insureds that outline clear underwriting information and consistent safety management are receiving the most competitive rates.”
Airports, aviation product liability and low limit general liability placements are said to be seeing the most competition amongst insurers.
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
