The ripple effect of the storms, earthquakes and wildfires in 2017 has brought an end to more than a decade of rate softening in the aviation insurance market.
Aviation accounts are now typically renewing with rates as expiring, with resultant increases to reflect any rise in exposure.
This is a big change for the market. Rates have stabilised at a time of continued improvements in airline safety – 2017 is likely to be the safest year on record for commercial jet airline fatalities.
However, the much higher cost of repairing the latest generation of aircraft and engines has led to some large non-catastrophic losses, which in the aggregate are close to the market’s total annual premium.
The recent stabilisation of the aviation insurance market should be seen as a positive.
Aviation insurance will be competing for capital against other lines of business in 2018, and further rate reductions may not have resulted in a sustainable market in the long term.
Aerospace tips for buyers
Cyber risk and insurance is of growing interest to the airline sector, which has seen major incidents in recent years.
Incidental cyber cover may currently exists under hull and liability policies, but it may not adequately deal with the threat and underwriters are likely to restrict such cover going forward. Clients should talk to a cyber expert and match their exposures to specialist cover.
For more information, please contact ClientFirst@jltcanada.com.