Vice President, Insurance
Over the last several years the Aviation Insurance market has underperformed due to poor industry loss ratios. Aviation related claims, underwriting consolidation, and redeployment of capital into preferred market segments have put pressure on insurers to increase hull and liability rates. Then there are external factors; the natural disasters incurred in 2018 (hurricanes, wildfires, flooding, earthquakes) and rising interest rates that have affected the overall insurance market and underwriting profits.
Even if you’ve not suffered any direct losses and have a strong handle on safety, that doesn’t seem to be enough in this market cycle. Additional focus on ownership, usage, culture, training, and relationships not only with your customers but your underwriting partners is a critical component of overcoming this period of uncertainty. Calculating your hull and liability limits has also become more challenging with improvements in aircraft technology and materials necessitating more expensive and extended repairs and the accessibility of people flying private.
Operators with less favorable experience have a tougher road ahead. There needs to be a top down commitment to improving operations and demonstrating a genuine plan toward profitability. Otherwise don’t be surprised at double digit renewal increases or carrying an unaccompanied portion of the risk. Additionally, if you been exercising the market each year for the cheapest deal that strategy may cause you more trouble now than had you solved the problem and worked with the right strategic partners all that time.
2019 will be a challenging year; working with your insurance teams to plan well ahead of the renewal date, negotiating multiyear deals, reinvesting into operational excellence, and reinforcing your partner relationships will help to mitigate unwanted market pressures.
At AVIAA we are taking a new approach to private aviation. We share data to help our members make supported decisions, disclose all fees and compensation, provide constant communication, education, and aggregate purchasing power offering lower costs, increased efficiencies, and reinvestment into our membership community. To learn more about potential risks or lapses in your coverage, operators can get a complimentary review of their insurance and risk management coverage by AVIAA experts. Schedule your review now.