Aviation sector growing on the back of economic strength and increased travel

Aviation remains a growing sector in the Latin American region due to the strength of the local economies during and subsequent to the Northern Hemisphere recession, says Russell Mason, general aviation underwriter, Antares Managing Agency.

“Travel in the region by air has steadily increased year on year and this has benefited the local airline industry as well as general aviation operators,” he said.

“We expect this to continue and, allied with many older airframes due for replacement, the future remains bright for continued aviation growth in the region. Some economies may not expand at the same pace, however, due to financial influences from the international markets.”

Mason sees the challenges presented by the Latin American region as broadly similar tothose in most other markets around the globe, although from a pure aviation point of view, it can sometimes be a challenge to get the technical information required.

“Premium payment issues are greatly reduced from the past and generally not a concern any more,” he added. “Like all markets Latin America is experiencing greater competition from a greater concentration of insurers and reinsurers willing to participate in the region and seeking expansion/income. As a reinsurer this competition now includes domestic insurers with greater retentions than in the past.”

Antares has always traded in the Latin American market, but ramped up its offering from an aviation viewpoint in 2012 following the expansion of the portfolio to include general aviation.

“Most LatAm countries are of interest to Antares for future writings but some remain off-limits due to regulatory influences and/or local competition swamping the marketplace,” Mason said.

Regulatory restrictions to overseas participants remain a headache in certain jurisdictions, he continued, but when one opportunity closes, often another opens, so overall it remains one of Antares Aviation’s preferred trading areas.

Antares’ plan in the region is to continue to focus on those countries that offer the best combination of underwriting opportunities, limited regulatory challenges and consistent/growing aviation infrastructure/maturity, he said.

“In a similar vein to other expanding markets, those parties offering flexible, competitively but sensibly priced solutions to their clients, in association with good security and with professional claims teams, will win out.”