Aerospace Insurance Market: Aviation Ground Handlers, Security Providers, and Caterers

The insurance pricing trends for aviation ground handlers, security providers, and caterers in the first quarter of 2021 are based on:

Key rating factors

Underwriter considerations include the nature and scale of activities undertaken by the insured, proximity to aircraft, staff training, risk management protocols, contractual indemnities, loss history, deductibles/self-insured retentions in place, and limit of liability.

Insurance market notes

Many ground handlers face a high frequency of low- to mid-severity losses — often involving damage to aircraft — due to close proximity to aircraft, a fast pace of work, and high staff turnover. The erosion of the premium base and increased administrative cost of handling these claims has limited insurer appetite and reduced available capacity. Insurers that continue to participate in the sector generally are reducing their line size, increasing premium, and, often, insisting that a large self-insured retention be in place. Caterers incur similar levels of scrutiny due to their proximity to aircraft, but generally have a more stable loss profile and are a more attractive risk for insurers. Regarding security providers, the concern among insurers is more in respect of war and allied perils, for example, a failure of security leading to an aircraft hijacking.

Premium trends

The data analysis is derived from the aggregation of hundreds of discrete insurance renewals for aerospace organisations. The de-identified sample set is global and encompasses results from organisations of all sizes, varying claims records, and a range of lead insurers. It should not be read as a guide in terms of what to expect at renewal, but rather an illustration of the general market trend.

Methodology

We use three types of calculations within the chart.

1. Weighted premium average: Total the premium spend per quarter, then map the percentage difference between corresponding quarters in different years.

2. Mean average: Take the percentage difference in premium between renewals for each account, sum the percentage differences, and divide by the number of percentage differences.

3. Rolling average: Accumulate data for the last four quarters and divide by four to get a rolling mean average.